Preamble

The House met at Eleven o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

NEW WRIT

Ordered, That Mr. Speaker do issue his Warrant to the Clerk of the Crown to make out a new Writ for the electing a Member to serve in this present Parliament for Enfield, West, in the room of the Right honourable Iain Norman Macleod, deceased.—(Mr. Francis Pym).

EARLY DAY MOTION No. 59

Mr. Leonard: On a point of order. I would be grateful for your Ruling, Mr. Speaker, or an expression of view, on a matter concerning the conventions of this House and the normal courtesies between Members. Early Day Motion No. 59, standing on the Order Paper in the name of the hon. Member for Ilford, North (Mr. Iremonger), concerns the personal affairs of a constituent of mine. It has been put on the Order Paper without either consultation with or warnning to myself. I am a new Member, but I am led to believe that this is a departure from the long-standing and generally accepted practices of this House. I raise this matter with reluctance, but it concerns an important point of principle. I have, of course, informed the hon. Member concerned that I felt obliged to take this step.

Mr. Speaker: I am grateful to the hon. Member for Romford (Mr. Leonard) for giving me notice that he intended to raise this point of order. I am afraid that cannot encourage him in his desire to draw attention to a matter which may affect another hon. Member but which is quite outside the responsibility of the Chair. The Order Paper is published under my authority and if any Motion were one of extreme irregularity

I could give orders that it should be withheld from the Order Paper, but this power is exercised only in the most exceptional cases and nothing that I have seen on the Notice Paper or in the Motion to which the hon. Gentleman refers would justify the Chair taking any such course.

Mr. William Rodgers: Further to that point of order. While I fully appreciate what you have said about your duties in this respect, it seems that this Motion is a most unusual one and that were the practice to be followed by Members as a whole it could make a substantial and unfortunate change in the acceptable relationships between Members of this House. The hon. Member for Ilford, North (Mr. Iremonger) referred to this Motion in discussion of the business of the House yesterday. If you feel unable to go farther than you have done, even to the extent of making an expression of view about how far the continuance of this practice would be harmful to our parliamentary ways, may I ask whether through you it would be proper to ask the Leader of the House or the Chief Whip to say whether it would be acceptable to them should this practice become commonplace?

Mr. Speaker: Order. Mr. Speaker can rule only on matters of order and I have ruled that nothing out of order has taken place.

INDUSTRIAL REORGANISATION CORPORATION

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): With permission, Mr. Speaker, I wish to make a statement about the Government's decision to wind up the Industrial Reorganisation Corporation. This was announced by my right hon. Friend the Chancellor of the Exchequer on 27th October, and I think it would be helpful to the House and to all concerned if I set out briefly the Government's intentions in more detail.
I shall be introducing legislation in due course to implement the Government's decision. This will provide for the transfer to the Government of the I.R.C.'s assets and liabilities. These, of


course, derive wholly from public money provided under existing legislation.
The total investments and commitments of the I.R.C. amount to well over £100m. From now on the Corporation will undertake no new commitments, but existing commitments will be honoured by the Corporation up to its dissolution and thereafter by the Government, except where otherwise agreed between the parties concerned. On taking over the investments, it will be the Government's policy to recover the loans in accordance with the terms of the various agreements, and to realise the equity investments as opportunity offers and prudence and commonsense dictate, due regard being had to the industrial and other factors involved in each case.
The Government's intentions do not imply criticism of the board and executives of the I.R.C. who have ably and with public spirit carried out the duties placed upon them by the legislation introduced by the previous Government, and I should like to take this opportunity of paying tribute to Sir Joseph Lockwood and his colleagues.
The I.R.C. will continue in being until legislation to wind it up has been enacted. I have asked the present board whether it would be prepared to continue in office for a further period to assist with the transitional arrangements, and I am glad to be able to tell the House that it is willing to do so.
Finally, and this is a related matter, the Government intend, as we made clear in our election manifesto, that the powers conferred by Sections 1–7 of the Industrial Expansion Act, 1968, will no longer be exercised and appropriate legislation will be introduced. There will be appropriate provision for existing schemes under the Act, namely, the Aluminium Smelters and Computers Merger Schemes. Existing commitments under these schemes will be honoured, but no further schemes will be introduced.

Mr. Harold Lever: Does not the right hon. Gentleman think it most reprehensible that he should have chosen this way of announcing this decision to the House, on a Friday morning, having given only the briefest notice to the Opposition? Could he explain why this has been done, particularly as he has known for well

over a week that one of my hon. Friends has an Adjournment debate today on this very subject? I do not want him to think that we are lacking compassion. I well understand that he wants the minimum amount of public witness and attention for what is an act of wanton and ritual slaughter done to please the narrowest-minded supporters of the right hon. Gentleman's party. While taking the opportunity of wishing the right hon. Gentleman well in his tasks on personal grounds, I urge him to be more cautious in his treatment of the House on matters of this kind than to make on a Friday morning, with unnecessarily brief notice, a statement of this kind.
May I ask the right hon. Gentleman whether the decision to abolish the Industrial Reorganisation Corporation was reached on purely doctrinal grounds without regard to the practicalities of the matter and the interests affected, or whether he consulted the C.B.I. and other City interests in relation to the possibility of the continued functioning of the Corporation? I am not suggesting that a change of Government could not reasonably result in some modification of the rôle of the Corporation, but has the right hon. Gentleman consulted the C.B.I. and other City and business interests to see whether they welcome the total destruction of a machine which has played a very useful part in assisting the Government in their economic activities?
Has the right hon. Gentleman studied the actions of other Governments abroad in instituting at this time instruments like the I.R.C. at the very moment when he announces the public abandonment of the Corporation?
Would he make clear what he intends to do with the assets? He has announced that he intends to realise the loans in accordance with their terms. Does that mean that he will be a particularly brutal creditor with automatic reflexes in relation to the loans or that he will act as any ordinary, prudent and common sense banker would act in relation to them? That is not to say that I anticipate that any of them will have any difficulty in meeting the terms of their obligations, but does he think it right in advance to announce that the loans will be enforced strictly in accordance with their terms? Does he not think that it would be more appropriate if the Government announced that they intended to act as any ordinary,


reasonable and understanding banker would act in these circumstances?
Will the right hon. Gentleman say what he proposes to do with the substantial quantity of national assets in the form of equities held by the Corporation? Has he given thought to the possibility that he is damaging the realisation price of the assets by his statement this morning, intending to indicate that he is a ready and almost reflex-action seller of any of the assets, not on the grounds of their worth or usefulness to the community, but because of the doctrinal motivation which runs throughout the statement? Does he think that he has done his duty by the public purse in devaluing in part the assets he has under his control? For example, will he say why he thinks it desirable, automatically and in blanket form, to dispose of these equities any more than it is desirable to dispose of the Government's British Petroleum holding?

Mr. Davies: I thank the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) for his good wishes, but for little else that he has said. The period of notice given for the statement was, I think, appropriate, and I would hope the fact that I made it will facilitate the debate which is to take place this afternoon on the Adjournment.

Mr. Harold Lever: Why did not the right hon. Gentleman—

Mr. Speaker: Order. If the Minister does not give way, the right hon. Gentleman must resume his seat.

Mr. Davies: The right hon. Gentleman asked me whether I had consultations with the interested parties: I can assure him that I had very wide consultation with the main interests involved. My decision was taken in the light of those consultations.
The right hon. Gentleman asked whether I have taken note of what other Governments are doing. Other Governments have done things in the past; one, if not two, to my knowledge, are doing something now, but that is not the same as the creation of an identical body to the Corporation.
The right hon. Gentleman asked what I planned regarding the realisation of the

assets of the Corporation. He asked whether I should be a brutal creditor and unthinking in the realisation of the assets. In my statement, I clearly stated that due regard would be had to the industrial and other factors involved in each case. I hope that that reassures the right hon. Gentleman.

Mr. Grimond: May I join in the good wishes which have been offered to the Secretary of State? I should like to ask him three questions.
First, will these measures, particularly the repeal of certain Sections of the 1968 Act, have any effect on the Highlands and Islands Development Board? Secondly, does the statement mean that the Government will not only wind up the Corporation but drop any active and positive interest in the reorganisation of industry, other than in the Monopolies Commission, and in take-overs and such like? Thirdly, while the Government remain substantial shareholders in certain companies, which situation may continue, I understand, for quite a long time, do they intend to behave as active shareholders or merely as sleeping partners? It is a matter of some concern to the firms that a considerable proportion of their equity may be transferred to a new holder. I trust that they will be told a little more about the general principles upon which that holder will act until the shares are disposed of.

Mr. Davies: I do not imagine, nor do I understand, that the repeal of Sections 1 to 7 of the Industrial Expansion Act, 1968, will have any impact on the attitude of the Government to the Highlands and Islands Development Board.
The Government take, and will continue to take, an active interest in the reorganisation and restructuring of industry. They will be in close consultation with industry. They will seek, in their own way, to assist industry to do what industry wishes. They will not seek to force down the throat of industry measures that industry does not want.
As regards the Government's position as a shareholder, the right hon. Gentleman will know that the Corporation, in acquiring these interests, undertook certain responsibilities towards the companies involved. The Government will diligently seek to respect those responsibilities.

Mr. Harold Lever: The right hon. Gentleman has failed to answer two points which I raised. First, why did he notify my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) of this statement last night, having known for a week that there was to be an Adjournment debate on this subject today, and why did he not at the same time notify the Opposition? Also, since he wrote to my hon. Friend, the right hon. Gentleman might, out of courtesy, have sent a copy of the letter to the Opposition.
The right hon. Gentleman has not answered my inquiry why he made a blanket decision to realise all the equity assets. Would he enlighten the House as to why he came to the conclusion that he should sell every equity asset of the Corporation?

Mr. Davies: Although I am a novice in these matters, I understand that the notification of the intention to make the statement was fully in accord with the usual practice and was reasonable. Therefore, I do not feel it incumbent upon me to apologise.
My statement did not refer in any way to a blanket decision, so I do not readily recognise the phrase. I have said and repeated, and I now repeat once more, that it will be my intention to have due regard to industrial common sense in realising the assets. I would have hoped that that would give the right hon. Gentleman all the reassurance he needed.

Mr. Kenneth Lewis: Can my right hon. Friend say what the Government's plans are for the disposal of staffs concerned? How much redundancy will be involved and will any redundancy payments be made?

Mr. Davies: No redundancy payments will be involved. The staff, under arrangements entirely amicably arrived at, are finding other appointments. Clearly a nucleus will need to be retained until such time as the Corporation is finally wound up. This again gives rise to no redundancy problem.

Mr. Shore: This is a petty, vindictive, doctrinaire statement. Is the right hon. Gentleman really telling us that he envisages no circumstances in future in which it would be beneficial for British

industry and for Britain as a whole to have available the resources, managerial and financial, of this great institution? Would he, even at this late stage, think again about this thoroughly bad decision?

Mr. Davies: I am not prepared to think again about this sensible decision. The right hon. Gentleman fails to include in his catalogue the fact that the Corporation was an activity of Government, and also the extraction of £150 million of taxpayers' money for the support of an activity in which the participation of Government is strictly doubtful.

Mr. Wingfield Digby: While I am not sorry to see the Industrial Reorganisation Corporation going quickly, may I ask my right hon. Friend whether, with regard to equities held, I believe, in one or two shipbuilding concerns, any attempt will be made to find a buyer for them, and whether this may not be rather difficult?

Mr. Davies: I am conscious of the problem this may cause, but all these matters will certainly be dealt with, having due regard to the interests involved.

Mr. Carter: On a point of order, Mr. Speaker. You will recall that I started from the very first weeks of this Parliament to try to raise this subject of the Industrial Reorganisation Corporation, and the point I wish to put to you is this. I rang up on Tuesday of this week, the earliest opportunity I had of doing so, the Secretary of State's office to ask what the Minister would want to do in this matter of the Adjournment debate this Friday, and it was not until 9.30 last night that I was informed of the statement to be made today. In view of the fact that previously the four Ministers then at the Ministry of Technology held this House in contempt one Friday afternoon in refusing to attend a debate on this subject, does the Secretary of State not feel that he should have behaved in a rather more civilised way when arriving at this subject this Friday? It appears that it is less than coincidental that the Adjournment debate has been pre-empted by the Minister with his statement.

Mr. Speaker: That is not a point of order for me. It is a point of criticism


which, no doubt, the hon. Member will make when he introduces the Adjournment debate.

Mr. Ogden: The right hon. Gentleman said his decision had been taken in the light of consultations he had had with interested parties. Would it not be more accurate to say that the decision was taken in spite of the consultations, and of the advice which he received during the consultations? He speaks of legislation. When may we expect it? Could he not be a little more generous in the tribute he has paid to an organisation, which, while admittedly introduced by a Labour Government, to help, in the main, private capitalist organisations and free enterprise, has had a real, effective rôle, an efficient, productive rôle, a profitable rôle for industry? Why does he think he may still not need it? What alternative method will he suggest to fulfil this Important rôle?

Mr. Davies: As regards consultation, I received mixed advice. I think, however, that the decision I have taken conforms broadly with the weight of the advice given. The balance of view, to my mind, lies squarely in the direction I have taken. As regards the means of bringing about similar activities, it should be borne in mind that the vast bulk of the restructuring of the operation of British industry has not been achieved by the Industrial Reorganisation Corporation but has been based, as for a countless period of years in the past, upon the normal market mechanisms.

OIL IN NAVIGABLE WATERS BILL

Order for Second Reading read.

11.25 a.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I beg to move, That the Bill be now read a Second time.
It is particularly appropriate in European Conservation Year that the first Bill to be introduced by me as Under-Secretary of State at the Department of Trade and Industry should be aimed at reducing pollution. The Oil in Navigable Waters Bill is intended primarily to enable the Government to accept amendments, made on United Kingdom initiative, to the International Convention for the Prevention of Pollution of the Sea by Oil which have this object. It also proposes other changes to our law on oil pollution designed to improve enforcement.
I need not enlarge upon the harm which our tourist industry, our fisheries and the wildlife which frequents our coasts suffer from the indiscriminate dumping at sea, despite the International Convention, of oil and oily residues arising from the operation of ships. Hon. Members will he all too familiar with the stories of spoilt holidays, damage to clothing and to carpets and furnishings in hotels and boarding houses as a result of oil on beaches and with the pathetic pictures of bedraggled seabirds vainly struggling to free themselves from the sticky mess which they have picked up somewhere at sea.
Some of this pollution results from disasters at sea. I need only mention the name of the "Torrey Canyon" and "Pacific Glory" to instance this. But the problem with which we are concerned today is that of the oil which is deliberately discharged into the sea in the normal course of ships' operations. It is this which accounts for the continual, unspectacular pollution which may occur all round our coast and is a nuisance on any beaches near the main shipping lanes. It is unnecessary, and ought to be avoidable. But the story of the efforts to prevent it is a long one, and the problem is still with us. I am glad to say that successive British Governments have taken a leading part in the struggle, and I think it might help the House if I were to give a little of the history of this whole matter.
The first modest attempt to deal with the problem on a national basis was the Oil in Navigable Waters Act, 1922. This followed a conference convened by the Board of Trade at which shipowners, the oil companies and harbour authorities were represented. It prohibited, under a maximum penalty of £100, the discharge of oil or oil mixed with water, into the territorial waters and harbours of Great Britain and Northern Ireland.
But it was soon apparent that such legislation was ineffectual. The kinds of oil which do the harm are persistent; they float on the surface of the sea and, under the influence of wind and tide, may be deposited on beaches many miles from where they were discharged. So there had to be some means of ensuring that oil was not put into the sea outside territorial waters but close enough to land to threaten coastal pollution. Moreover, shipping is essentially international; many of the ships which call at our ports are foreign, and many more foreign ships pass doss to our coasts on their way to and from other countries in Europe.
By the middle 1920s the nature of the problem was beginning to be realised by most other countries, and the first of several international conferences to consider the problem was convened by the United States Government in Washington in 1926. The conference recommended a system of zones within which the discharge of oil should be prohibited; the zones would not in general exceed 50 miles from land but might in exceptional cases extend to 150 miles. It proved impossible to secure international agreement on this, but British shipowners, together with those of some other countries, in 1926 voluntarily adopted the 50 mile zone recommended by the Washington Conference. An extension of the United States zone to 100 miles in 1936 was also honoured by British shipowners.
Other attempts were made to secure international agreement on measures to prevent pollution, but it proved impossible to draw up a formal international convention before the outbreak of war in 1939, when for some time we were all concerned with more pressing matters.
In 1952, however, amid growing concern about the frequent and heavy pollution of beaches on many parts of our coasts, the Government appointed a com-

mittee under the chairmanship of Mr., later Sir, Percy Faulkner of the Ministry of Transport, which was the Department then concerned with shipping,
… to consider what practical measures can be taken to prevent pollution by oil of the waters around the coasts of the United Kingdom and to report.
The Committee recognised the international nature of the problem and in its report included, among a number of valuable recommendations, one to the effect that the Government should as soon as possible seek the agreement of other maritime countries to the fixing of a date after which discharge into the sea of persistent oils by ships of any country would be prohibited.
The then Government acted on this recommendation and convened an international conference in London in 1954, which drew up and opened for signature the International Convention for the Prevention of Pollution of the Sea by Oil, 1954. It is this Convention which forms the basis of the law of all the major maritime countries on prevention of oil pollution of the sea. Briefly, the Convention, which now has 42 contracting parties, prohibited the discharge of persistent oil, defined as crude oil, fuel oil, heavy diesel oil and lubricating oil, or a mixture containing 100 parts per million of such oil within specified areas of the sea known as prohibited zones.
The prohibited zones extended generally up to 50 miles from land, with wider zones in specially sensitive areas such as the North Sea and the eastern Atlantic. There were exceptions for discharges to save a ship or save life and for discharges due to accidental damage or leakage. The Convention also provided for ships to carry an oil record book in which certain operations involving oil carried out on board would be recorded.
The conference passed a number of resolutions recommending action supplementary to that provided for in the Convention. One of the most important resolutions passed by the conference declared that complete avoidance of the discharge of persistent oils into the sea should, with certain necessary exceptions, be observed from the earliest practicable date and recommended a further conference within three years to review the working of the Convention.
In fact, the further conference was not held until 1962, by which time the recently formed Intergovernmental Maritime Consultative Organisation—I.M.C.O.—had assumed responsibility for the International Convention. This conference was also held in London and its convening was again due largely to the initiative of the British Government. It recommended a number of amendments to the 1954 Convention.
These included extension of the prohibited zones to 100 miles along many coasts, a larger Atlantic zone and the closing of the whole of the North Sea to discharges of persistent oils or oily mixtures. They also provided that for ships over 20,000 gross tons ordered after the amendments came into force internationally the discharge of persistent oil or oily mixture should be forbidden anywhere at sea and not only within these prohibited zones. The amendments came into force in May, 1967.
The 1954 Convention was put into effect for United Kingdom ships by the Oil in Navigable Waters Act, 1955. Besides applying the Convention's provisions to ships registered in the United Kingdom, the Act made it an offence for oil of any description to be discharged into our territorial waters from ships of any nationality or from places on land. It provided penalties for illegal discharges of oil of £1,000 on summary conviction and an unlimited fine on conviction upon indictment. It also dealt with equipment in ships to prevent oil pollution, with the keeping of records, with questions concerning discharges of oil in harbours and facilities for the reception of oily residues, with powers of inspection and a number of general administrative matters. The necessary amendments to the 1955 Act to give effect to the 1962 amendments to the Convention and to impose the more stringent requirements for new ships over 20,000 tons were made by the Oil in Navigable Waters Act 1963.
There can be no doubt that the 1954 Convention has helped to limit the amount of oil deliberately put into the sea by ships in the course of their normal operations. Yet, alas, pollution of beaches and of the waters round our coasts has continued to occur all too frequently. It has become increasingly

apparent that, valuable as it is, the Convention needs further strengthening. If all ships kept conscientiously within the Convention restrictions there would he no problem; but there are too many ways in which the restrictions can be evaded, and clearly many ships are ready to take advantage of them. Indeed, we see some of them doing so, but it is rarely possible to prosecute successfully for an offence outside territorial waters.
One of the main difficulties is the need to prove, in respect of a discharge outside territorial waters, that not only was persistent oil discharged by the ship but that it was discharged in a concentration of 100 parts per million or more. This is virtually impossible without a sample of the mixture discharged. Yet at the same time there is no particular merit in the 100 parts per million criterion, since modern tankers with their high pumping rates could discharge substantial quantities of oil without exceeding that concentration, and if stationary or slow-moving they could cause substantial pollution.
The Convention also permits unlimited dumping of oil outside the prohibited zones. Not only does this involve a risk that this oil, dumped perfectly legally, may eventually find its way on to the beaches; it also tends to encourage unscrupulous operators to dispose of oily wastes inside prohibited areas under cover of darkness or bad weather, for if challenged on arrival in port with clean tanks they can claim to have disposed of their oily residues outside the prohibited areas.
The need for amendment of the Convention was further underlined by the development in recent years by the major oil companies of the "load on top" system of tanker operation. Under this system, the oily residues arising from tank ballasting and cleaning operations are retained in the ship, after discharging as much of the ballast and cleaning water as can safely be put into the sea, and they are mixed with the next cargo.
This system, which is now practised on about 80 per cent. of the world's tankers, is estimated to have reduced total pollution of the sea by about 2 million tons a year—and here I gladly pay tribute to the contribution which this voluntary effort on the part of the oil companies has made to the campaign for cleaner


seas. But, ironically, every time this system is operated there is a possibility of a technical infringement of the Convention. For a short time during the final discharge of the unwanted water the oil content of the effluent unavoidably exceeds 100 parts per million, though as this period is short and the rate of pumping low, the oil quickly disperses and does not cause lasting pollution.
All these considerations led us to question the validity of 100 parts per million or any other such ratio as the criterion for a discharge which pollutes the sea. We sought an alternative measure which would both be more closely related to the behaviour of oil in the sea and easier to enforce. Experiments conducted by the Warren Spring Laboratory showed that the amount of oil discharged, whether mixed with water or not, in relation to the distance travelled by a ship is more important in determining whether lasting pollution will result, while the amount of water it is mixed with makes little difference. So long as the amount of oil discharged is kept within reasonable limits the oil is rapidly dispersed by the movement of the ship and disappears completely within a few hours, so that there is no threat to the coast if it is discharged reasonably far from land.
We therefore proposed to I.M.C.O. that the Convention should be amended so as to do away with the notion of prohibited zones and to make the discharge of oil anywhere at sea an offence if the rate of discharge exceeded a given rate per mile. The rate we chose was the instantaneous rate of 60 litres per mile which has been shown by experiment not to give rise to a lasting slick. To limit the time during which oil could be discharged at that rate, we proposed an upper limit on the total quantity of oil that could be discharged during a single voyage. At the same time we proposed that the oil record books carried by ships, especially tankers, should be revised so as to give a much more accurate record of the fate of all oil taken on board. These proposals were eventually adopted in a modified form by I.M.C.O., although some member countries were reluctant to abandon the old familiar criterion of 100 parts per million for a polluting oily mixture.
One of the modifications was the imposition of a ban on the discharge of any oil whatever from the cargo spaces of tankers within 50 miles of land. We were not opposed in principle to a restriction of this kind, which obviously is an additional safeguard. But it may create difficulties for tanker owners and we considered that a much narrower zone could give adequate protection. But despite our arguments 50 miles was adopted and we must accept it as part of the price to be paid for acceptance of the amendments as a whole. The limitation on the amount of oil which may be discharged by a tanker during a ballast voyage was fixed at one fifteen-thousandth of its cargo-carrying capacity. For ships other than tankers and for the bilges of all ships, which are not subject to the total ban within 50 miles of land, it was agreed that discharges must have an oil content of less than 100 parts per million as well as meeting the 60 litres per mile criterion. This is practicable because oily water separators can readily be used for such discharges.
In addition to these major changes in the basis of the control applied by the Convention, it was agreed to do away with certain exemptions which are no longer essential and which have materially helped those who seek to evade control.
The Bill now before the House proposes the amendments to the Oil in Navigable Waters Acts needed to enable the United Kingdom to accept these amendments. Clause 1 amends Section 1(1) of the 1955 Act, which relates to discharges of oil by United Kingdom ships into prohibited sea areas; except as provided under that Act discharges of oil by ships registered in the United Kingdom will be prohibited anywhere at sea outside territorial waters. Discharges of oil within territorial waters are dealt with in Section 3 of the 1955 Act which is being retained. In order to provide for the exceptions to this outright ban allowed by the amended Convention, regulations will be made under Section 1(3) of the 1955 Act, which is not being amended.
Clause 2 of the Bill does not arise from the amended Convention, but remedies a defect which we have discovered in Sections 3 and 4 of the 1955 Act. Where a person was charged with an illegal discharge as the occupier of a place on land it was a defence under Section 4 to prove that the discharge was


caused by the act of a person who was in that place without the permission, express or implied, of the occupier. It is hard to conceive such circumstances, but I am told it actually has happened. But the act gave no power to proceed against the intruder if he could be identified and apprehended. Clause 2 amends Section 3 so as to make the intruder guilty of an offence in these circumstances, if you can find him.
Clause 3 substitutes for Section 7 of the 1955 Act a revised and extended section providing power to make regulations governing the more detailed oil record books which ships must keep required by the amended Convention. It also provides a specific power, which we have hitherto lacked, to require ships to carry an oil record book as distinct from requiring them to make records of certain operations. It also makes falsification of oil record book entries an indictable offence.
Clause 4 amends Section 6 of the 1955 Act so as to increase from £1,000 to £5,000 the maximum fine which may be imposed on summary conviction for an illegal discharge of oil or for contravention of regulations governing the fitting of equipment to ships to prevent oil pollution. This Clause does not arise from the amended Convention, although I.M.C.O. has been urging its members to review their penalties for oil pollution offences to ensure their adequacy.
I accept that £5,000 is a high maximum penalty for magistrates to be able to impose, but as ships rarely stay long in our ports the vast majority of oil pollution offences, particularly by foreign ships, have to be tried by magistrates and it is essential that the penalties should be adequate. It is no use our improving the law so that we may more readily proceed against flagrant offenders, if the punishments which follow make no impact, as is often the case now.
There may be a cost incentive to flout the law, and those who do so should risk a fine which will at least outweigh any savings. I therefore attach especial importance to this increase. It may incidentally benefit those who are put to the expense of clearing up the pollution, since the court may direct that they be recompensed out of the fine itself.

Mr. John Nott: Could we be told why it is not possible substan-

tially to increase the fine beyond the fine of £5,000? I understand that on indictment the fine can be unlimited, but £5,000 is a derisory figure for a magistrate to impose on a large oil company. Why cannot it be £50,000?

Mr. Grant: I fully appreciate what my hon. Friend says, but he should understand that we have gone quite a long way from the original fine of £1,000. By going to £5,000 we have gone very much in excess of the fall in the value of money and have given a penalty which is very large for magistrates themselves to impose. I hope he will accept what I say and, indeed, he will be able to develop his argument in Committee or, if he catches the Speaker's eye, in this debate today. I emphasise that it is a substantial increase on the previous fine.
Clause 5 enables the law on oil pollution to be applied to Northern Ireland. The remaining Clauses and the Schedules are largely formal, but I should like to draw attention to two of the Sections repealed by Schedule 2. The first is Section 2 of the 1955 Act, which provided for the designation of prohibited sea areas. Under the amended Convention tie whole sea will become a prohibited area for discharges which exceed the limits laid down in the amendments, and this Section is thus no longer required. The second is Section 2 of the 1963 Act, which prohibited the discharge anywhere at sea of oil or mixtures containing 100 parts per million or more of oil by ships over 20,000 gross tons ordered after May 1967. This provision will be unnecessary since the provisions of the amended Convention, which apply anywhere at sea, will cover these ships in the same way as other ships.
Finally, Clause 8, which is important, enables different provisions of the Bill to be brought into force by order on different days. This will enable us, for instance, to give effect to Clauses 2 and 4 as soon as the Bill passes into law. The amendments to the Convention will take effect internationally only 12 months after two-thirds of the signatories of the Convention have formally accepted them. This may take several years, and we believe that it is undesirable to wait that long. As soon as practicable after this Bill has been enacted, therefore, I propose to introduce an order together with


the necessary regulations under Section 1 (3) of the 1955 Act for the purpose of applying the provisions of the amended Convention to all United Kingdom ships. There will be the usual consultation with the industry in the preparation of these regulations, but I am glad to say that this anticipation of our obligations under the amended Convention is supported by the industry in principle. The United States government has decided to take similar action in respect of United States registered ships, and we are urging other leading maritime nations to follow this example.
This is a modest Bill but an important one. It represents another step forward towards the aim, declared as long ago as 1954 by the nations which gathered at the International Conference and reiterated at the subsequent conference in 1962, of the complete avoidance of the discharge of persistent oils into the sea. Full achievement of that aim remains some way off and we must continue to work, on the one hand, for the improvements in ship design and operating procedures which will make it technically possible. On the other hand, we must work for an attitude of mind among seafarers in which the avoidance of pollution will be regarded as one of the most elementary requirements of good seamanship.
The House will want to examine the details of the Bill with care, but I am confident that in principle it will command general support. There was full consultation with the shipping industry in the negotiation of the Convention amendments, and they want to see them implemented. There has since been consultation with representatives of the many interests concerned with coastal pollution by Departments of Government. There are those who wish for even faster progress, as indeed we all would if it were practicable, but I am happy to say that there is a general welcome for what we now propose. I believe that the proposals are sound and valuable, taking realistic account of what can be expected of modern shipping, of the need for controls that can be successfully enforced, and of the need for all the shipping nations to act together. I am confident that, when they come into force, they will facilitate real progress in the battle to keep our seas and beaches clean.

11.50 a.m.

Mr. Roy Mason: We on this side of the House welcome the Bill. To begin with, it is ours. First of all, it is ours in the sense that this sort of Measure always commands all-party support. It is in keeping with our vanguard position in international shipping matters and represents our national concern at the pollution of the seas from oil. But my right hon. Friend the Member for Caernarvon (Mr. Goronwy Roberts) and I would say that it is ours, anyway. When we were in office at the Board of Trade, we were keen to see established on the Statute Book a trio of shipping Bills. The first was to modernise the archaic and outmoded 1894 Act which governed merchant shipping operators and their seamen. The second was to effect measures to enhance trawler safety and make the working lives of our fishermen safer and more endurable. We managed to get both enacted. Thirdly, we wanted to cut back the awful and expensive side effects of oil discharges at sea. Therefore, we presented this Bill. However, we did not have time to pass it before the General Election.
This small but very important Bill is the result of many years of endeavour by Governments of both parties, shipping organisations, oil companies, the Inter-Governmental Maritime Consultative Organisation and a few keenly interested individuals. It does not go all the way to eliminate discharge of oil at sea, but it is a big step towards it.
The hon. Gentleman went through the chronological order of events dating back to 1922. One or two people in recent times have been especially interested in the subject. One of the hon. Gentleman's right hon. Friends, the Viscount Boyd of Merton, then Mr. Lennox-Boyd, was responsible in 1952, when he was Minister of Transport and Civil Aviation, for setting up the Faulkner Committee to investigate oil pollution. In 1953, my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) organised in London an unofficial international gathering on the subject and, flowing from that unofficial international gathering, the first major international conference was held in London in 1954, which 42 countries attended. Flowing from that, the International Convention for the Prevention of Pollution of the Sea by Oil was the result.


In 1955, I am pleased to say, we were the first of any of the Convention countries to enact a Bill. Further Amendments were made in 1963, and then came a major conference in Brussels last October when I.M.C.O. adopted more far reaching changes, and, flowing from that conference, this Measure is before us and no doubt before many of the Convention countries.
Once again we are in the forefront. We are giving a lead to many of the Convention countries to have international legislation which will almost stop oil discharges at sea and thereby, apart from accident, eliminate most of the oil pollution which causes so much concern to so many people.
We have a proud record, and rightly so. We are one of the foremost merchant sea going powers. We are a nation which employs or has operating a large oil tanker fleet. Above all, we are acutely aware of the serious damage to many forms of life and different aspects of living which oil pollution can cause. Only in recent times have people become seized of the many dangers of pollution in a host of different forms: pollution of rivers by chemicals and detergents, pollution of the air from heavy industry and conventional and atomic power stations, aircraft noise, and so on.
Regarding pollution of the sea by oil, there have been many studies, much research and, above all, a gradual strengthening of Parliamentary Acts to control it. These have been very much in evidence over the past 18 or 20 years.
When one considers what oil polluted seas and rivers can do—the injury to natural life, scarring the amenities of many coastlines and beaches, the burden on local authorities, resorts, hoteliers, the ruination of holidays, the added work put upon port and harbour authorities and especially the death and destruction of birds, fish, marine organisms and other forms of wild life—the need to combat oil pollution is of paramount importance.
The seas are international. Therefore, many nations have to be moved into action. It is good that we lead and, indeed, many of the amendments in the Bill before us originated in proposals made by the British shipping industry.
Hitherto, the International Convention adopted by most countries has banned the discharge of persistent oils or oil mixtures in prohibited zones. But oil has been allowed to be dumped quite freely in some parts; in fact, in great areas of the oceans of the world. These new amendments embodied in the Bill will make virtually the whole sea a prohibited zone, apart from a legal discharge, with the ban applying especially to persistent oil exceeding the instantaneous rate of discharge of 60 litres of oil for each mile travelled. The rate of discharge which is legally allowed represents an important section of the Bill. Many experiments of oil discharges at sea, particularly in the Bristol Channel by the Ministry of Technology and the Warren Spring laboratory, have proved that, at the rate of 60 litres of oil released for each mile travelled, slicks are so thin that they disappear within a few hours.
I notice that there will also be additional restrictions on tankers, including an absolute ban on discharges of oil in any quantity within 50 miles of land.
These are great steps to take, one of the most important being a legally defined minimum operational pollution discharge while in the midst of the oceans, with no discharges at all within 50 miles of the coastline. If the great oil tanker owning nations will quickly adopt these recommendations, then, apart from accidents, the menace of oil pollution on our beaches and coastlines and the dreaded toll on our wild birds and marine life will have largely disappeared.
At this point, I pay tribute to the Chamber of Shipping and the oil companies, especially B.P. and Shell. They have been most co-operative and have spent large sums of money in finding adequate and acceptable solutions. Saving oil is profitable to them, anyway. But, in fairness to the oil companies, they have co-operated with the antipollution lobby. Shell devised the "load on top" technique, whereby a tanker at sea can retain its tank washings on board instead of dumping them at sea. The technique has been widely adopted by oil tanker owners.
I was not clear when the hon. Gentleman was speaking about the extent to which the "load on top" technique is


completely compatible with the Bill. I hope that he will spell out the extent to which the technique is compatible with the instantaneous rate of discharge—in other words, the allowable operational pollution rate—or whether it will be necessary for special regulations to be made to cover this type of operation.
When one sees the growth of our oil imports, now running at about 114 million tons a year, the average size of tankers having doubled in the last five years, with 250,000 to 300,000 ton vessels now on the seas and feasibility studies being carried out for 500,000 tons, it is all the more commendable that oil companies have co-operated. But there are mavericks. Therefore, it is essential that they are controlled by Act of Parliament and by fines.
Here I must honestly praise the work of the Board of Trade. It has been most assiduous in its functions under the Acts and their Amendments over the past ten years. In 1960 there were 1,100 inspections by Board of Trade surveyors to ensure that shipowners and skippers of tankers complied with the Acts. There were 35 prosecutions, 33 convictions, and fines totalling £3,900 ten years ago. In the last full year, 1969, there were 2,267 inspections, 80 prosecutions, 77 convictions and a total of £17,550 in fines.
The menace is still real. There are many on the high seas still seeking to outwit the law. It is right, therefore, in the light of these figures, that fines in the Bill should be considerably increased. I lent a sympathetic ear to the intervention from the hon. Member for St. Ives (Mr. Nott) when he asked, "Is this sufficient?".
Incidentally, over the span of the last ten years Board of Trade surveyors carried out 22,264 inspections, convicted 496 people, and took in £70,741 in fines. So in this sense they have been doing their job well. No doubt, by increasing fines in the Bill from a maximum of £1,000 to £5,000 for illegal discharges of oil, their burden will be somewhat easier.
But their rôle may gradually change, because another Amendment to the Convention contained in the Bill is to turn a ship's oil record book into a ledger in which a full account must be kept of the receipt and discharge of oil. Because of this, it would now appear necessary, and quite soon, to set up machinery

for the frequent scrutiny of oil record books and the inspection of ships, with perhaps greater co-operation between the maritime countries regarding the prosecution of offenders where the evidence shows beyond reasonable doubt that an illegal oil discharge has been made. It is pleasing to note that making false or misleading oil records will be an indictable offence with a maximum of two years imprisonment or an unlimited fine.
I have mentioned I.M.C.O. briefly so far. It is the only United Nations Organisation agency in Britain. Its headquarters are in London. It is right that it should be here. Under the previous Director-General, M. Roullier, and now under Mr. Goad, oil pollution of the seas has been kept well to the forefront of its priorities. It must have been very pleased with its meeting in Brussels last October. I think that its international agency work in this sphere is proving justifiable. No doubt the R.S.P.C.A. and the Bird Protection Societies are feeling very grateful to I.M.C.O. in this regard as well.
There are bound to be a number of queries—some directly related to the Bill and others of general concern indirectly related to the matter before us.
I was pleased, therefore, that the Minister was able to tell us in his opening speech that, akin to the statement by the President of the United States, as soon as the Bill is enacted we will immediately carry out its provisions and not wait for the requisite majority of the Convention countries. That is most welcome.
My second query concerns policing. What more do the Government envisage than the incidental sighting of oil slicks by aircraft and ships? At the moment, no doubt all discharges at night go undetected, and, without doubt, most sightings of oil during daylight rarely lead to positive identification of the guilty tanker. There are many sightings, no doubt many guilty, but not all are caught. All this, I know, will be made more difficult for the maverick to get away with, because of the oil record book.
But what of enforcement? What more can we do? First, what more can we do regarding policing and,


secondly, what more can we do regarding enforcement? Discrepancies in the log should prove guilt, even though it has not been witnessed.
Analytical techniques are now available for comparing a pollution sample with that of the tanker—matching the various characteristics of the two. A mismatch would clear the vessel; but, unfortunately, a complete match would not necessarily prove guilt. A number of oils may have similar characteristics. Therefore, additional evidence is required. That is bound to be the position of the ship at the relevant time in relation to the slick. Therefore, policing will be essential. We have got the logbook and the sample testing, but we need to know more about the whereabouts of the vessel so that we can complete the total examination. Given all these factors, enforcement must then be rigorously followed through. This really is the test whether the Bill will succeed or fail.
The Board of Trade—now the Ministry of Trade and Industry—or that section concerned with trade within that vast Ministry, and I.M.C.O. must, at the outset of operating the Act by any of the major maritime countries—not necessarily waiting for the requisite number to ratify—seek the co-operation of all maritime nations regarding the prosecution of offenders where the evidence shows beyond reasonable doubt that an illegal discharge has been made. It must be borne in mind that such steps as the arrest of skippers or ship masters on suspicion of oil pollution might provoke retaliatory action against our own ship masters abroad. If, therefore, international co-operation is not forthcoming, nations will be hesitant to act, and this laudable effort to keep our seas clean will fail.
In the context of legal and illegal discharges of oil at sea, whilst oil tankers will bear the brunt of this legislation, many other classes of vessels should be involved. Will the Minister, therefore, indicate, without worrying unduly about the size and tonnage of the vessel, how warships, naval auxiliaries, and the fishing fleets will be affected, not only regarding their discharges at sea, but also particularly their logging of receipts and releases and the inspection of logs at ports and naval bases?
There is obviously one other major pollution danger—the accident at sea or, particularly, a tanker collision. I know that traffic separation schemes are being developed to minimise the risk of collision in narrow waterways, in straits, and in channels; that is, separate routes for traffic proceeding in opposing directions with a separation zone between these routes. The Board of Trade, the Chamber of Shipping, I.M.C.O. and the oil companies are co-operating, and the Institute of Navigation has been responsible for initiating these schemes. However, despite this progress, it is evident that the traffic separation schemes and collision regulations are not keeping pace with the growing size of oil tankers, their cumbersome operations at sea and, above all, the enormous and tragic consequences of oil tankers colliding at sea.
The problems of these large, especially super, oil tankers seem to break down into explosions at sea, collisions, and strandings.
Tanker explosions at sea, usually leading to the rupture of cargo tanks, normally occur when the tanks are empty of oil. Indeed, it is significant that the explosions which have occurred in recent times have all been when the ships were in ballast and there was no massive pollution, even from the three super tankers in the 200,000 deadweight ton range. I do not think, therefore, that as a rule explosions will be a major polluter.
My major concern is that of collisions and strandings, typified by the "Torrey Canyon" stranding, and now the "Allegro"—"Pacific Glory" collision. First, I think that we have to recognise the size of the problem. Nearly 500 million tons of oil are now imported into Europe—Britain alone imports about 114 million tons a year—and most of this oil is transported through our waters. The sea lanes round our coasts are the busiest in the world. The Western approaches and the English Channel are the main seaways leading to many refineries in Western Europe and the British Isles.
There are about 110 strandings and collisions of oil tankers every year, and an analysis of the figures shows that at least one in ten of these accidents occurs in our approach and coastal seaways. There are more than ten oil tanker


accidents per year, each of which, as time goes on, could produce pollution and devastation akin to the "Torrey Canyon" saga. That is how real the situation is.
In the light of this brief, stark survey I think that the Government must more urgently press for special separation schemes and tanker collision regulations. I know that I.M.C.O. is working towards a new code for approval in 1972, but even if it is accepted then it may take some years for rectification and implementation by all the countries concerned. Meanwhile, there is undoubtedly the possibility of further pollution to our coastlines through tanker accidents.
We must press for a quicker remedy. This country more than any other is the sufferer. I gather that the new international regulations will have in mind widening longitudinal and lateral separations of vessels, and also the need to give ships masters the right to make more efficient use of radar to take action at long range and so prevent a "close quarters" situation developing, as no doubt happened in the recent accident.
That is all very well, and will no doubt help in avoiding the close quarter situation and also in establishing avoidance techniques, but I ask the Ministry of Trade and Industry to press for something more urgently. These oil tankers are the special vessels of the sea. They are there in vast numbers. There are risks of explosions. They are very expensive vessels. They are the great polluters, with all the pollution consesequences. They are now becoming massive in size, and they are difficult to manoeuvre in restricted waters. These ships, especially the super-tankers, should now be destined and categorised as the "Queens of the Sea" not, as I saw one editorial call them, "floating fire bombs".
The stature that I would give them is that at all times these oil tankers, and particularly the large ones, should have the right of way, and all vessels should give way. In my opinion this would considerably lessen the dangers of collision. These large deep draft vessels should, especially in our approaches, the English Channel and round our coast line; be regarded and treated as "hampered", and at all times given the right of way. In some areas smaller

vessels are not subject to any restrictions of manoeuvre. Consequently they can easily cause a large tanker to take avoiding action, resulting in a "Pacific Glory" collision.
If we could, as a matter of the highest priority, affect that change and call for compliance by all the other maritime countries that use our waterways and our coastline, this alone would greatly reduce the accident rate and considerably lessen the periodic pollution of our shores, because it could quite quickly happen again.
I had hoped that the Minister would have said something about the "Allegro"—"Pacific Glory" collision. I gather that both vessels have had Admiralty writs served against them covering salvage and damages for oil leaks and, indeed, that action has been taken by the Government against the shins to stop oil leaks and pollution, but what about our own British inquiry? In spite of the difficulties—I know that the ships are outside territorial waters, that they are both under the Liberian flag, and so on—but should not we know from the Minister what did happen, and why cannot he use this opportunity to give us a report? I hope that when he rises to speak again he will take the opportunity to do that.
I should also like the Minister, if he can, to say a little more about the Government's intentions on policing, and their views on enforcement. Perhaps he could tell us how other vessels are to be affected. Finally, I hope that he will deal with the point that I made about giving higher priority as a matter of urgency to the question of the right of way of oil tankers.
This is a good Bill. It is ours, and it has our blessing.

12.17 p.m.

Mr. Simon Wingfield Digby: The right hon. Member for Barnsley (Mr. Mason) has given us a wide survey of the subject dealt with in the Bill. He has spoken with obvious interest, and we have to concede that he has made a contribution to the wide subject under debate.
The right hon. Gentleman touched on a number of problems which remain, and he spoke of the difficulty of policing and detection. One of my first queries


is about the coastguard forces, because they have been reduced and have reached a low level, indeed, and I wonder whether steps should be taken to look at the matter again so that slicks can be detected as quickly as possible.
The right hon. Gentleman then spoke of the difficulty of arresting skippers, and about how open we should be to retaliation throughout the world if that happened. That is obviously a danger if we adopt that practice.
The right hon. Gentleman posed as the friend of the super tankers and said that everyone should make way for them, and I can see his point.
I congratulate my hon. Friend on the way in which he introduced the Bill, and wish him good luck in his new responsibilities.
I should now like to explain why I am intervening in the debate. First, because I was a member of the Select sub-Committee which examined coastal pollution following the "Torrey Canyon" disaster. We sat for nearly a year and examined a mass of evidence, a lot of which was extremely depressing from the point of view of the effect of coastal pollution.
Second, my constituency has a fine stretch of coastline from Portland Bill to Lyme Regis, including the Chesil Beach. It is particularly vulnerable to oil slicks. Those hon. Members who have read Moonfleet will remember how easy it was for a sailing ship to become embayed in Lyme Bay, and I imagine that the same thing could happen with an oil slick. We are therefore particularly vulnerable.
Recently I have suffered considerable anxiety because of the decision to transfer there oil from larger tankers to smaller ones to go up through the Channel, as there might be some escape of oil when that happens. So far the oil companies have been successful in avoiding slicks occurring at that point. Today our attention should be focussed on these dangers by the case of the "Pacific Glory", particularly because, as I understand it, these two tankers were travelling on parallel courses. The situation highlights the dangers of collisions, particularly in the English Channel.
As the Minister admitted, this is a modest Bill, and it can produce only limited results. The first thing that we have to remember is the limitations to the Bill. It will deal with certain undesirable discharges to a certain extent in so far as this can be enforced. We must remember that the danger of collision continues. In the three years before we issued our report, there had been 238 tanker collisions in the world and I imagine that they are increasing. In those three years the number of strandings had been 91. Now we have this danger from explosion, although it is true that the explosions usually seem to take place during the process of cleaning the tanks when not very much oil is normally present.
I have obtained the Convention from the Vote Office and I was rather alarmed to see the limited number of signatures. This is up to April of this year. There are many countries which have not signed. It gave me no thrill to see that Switzerland had signed, but I was very worried to see that Liberia had not. Liberia has replaced Great Britain as the largest owner of merchant shipping.
I hope my hon. Friend can tell us more about this. Half the value of the Convention will go unless major maritime nations sign. Liberia is the best-known of the various flags of convenience. Apart from the problems of stranding and collision, about which no Act of Parliament can do very much, there is the problem of cleaning tanks near the coast. We all know it is going on. It will need great co-operation not from British owners but from other countries to deter these people and stop this practice. We should remember that only one-fifth of the tankers bringing crude oil to this country are British. The other four-fifths are foreign. This problem concerns them much more than our own owners. The system of "load on top" devised by the big oil companies has been mentioned. Those of us who have seen the film about it were very impressed. The problem is that 20 per cent. of the tankers partly in the smaller countries are not using it.
We must remember the great difficulties there are once an oil slick has developed. Those of us who sat on that Committee were impressed by this factor. I came away from those deliberations


with the feeling that by far the best thing to do in the case of a stranding or collision was to transfer the oil and in today's papers I see there are pictures of the transfer of oil from the "Pacific Glory". I see that they have been able to bring the smaller tanker alongside, not usually an easy procedure. It would have been impossible with the "Torrey Canyon". Usually the transfer has to be done at some distance with considerable lengths of pipe. I am in no doubt that the best thing to do is to transfer the oil as quickly as possible after an accident, even if the interests of the owners of the ship and of the oil would not dictate that course.
There is the possibility of burning the oil and the "Torrey Canyon" made quite clear how difficult that is. About an hour after the oil has entered the seawater, combustion becomes almost impossible. Another point which has been examined is the use of booms to contain the oil once it has escaped. These have proved to be ineffective on the whole. There has been much controversy about the use of detergents and an enormous sum of money was spent after the "Torrey Canyon", about £1 million, on spraying detergent upon the oil. I think the evidence is that the effects of this were not really satisfactory.
One could not but admire the efforts of the French when the slick got out to the French coast, using chalk as a sinker, when the oil had reached deeper waters. More thought and study must go into the question of using chalk and other sinkers when dealing with this problem. Several hon. Members have spoken about the effects on our beaches. Those of us who saw pictures after the stranding of the "Torrey Canyon" will need no convincing of this. There is, too, the effect on wild life and fish life and we must treat this problem seriously, doing anything we can to prevent it.
The problem of enforcement is really the great obstacle. Whatever Acts of Parliament we pass, whatever Conventions are signed by the principal maritime countries, it is still very easy to clean the tanks at night much too close to the shore. We need vigilance. I.M.C.O. has to go on trying to persuade its members and observers to make its skippers play the game.
There is one more point and that is the extreme vulnerability of the United Kingdom. We have heard about the increasing size of tankers. A couple of weeks ago I was on the North-East coast watching the launching of a giant ore carrier, the "Furness Bridge", 167,000 tons which can also carry oil. Others will follow, on the Lower Clyde, of 250,000 tons. These huge ships have come to stay. They are far larger than the "Torrey Canyon", able to carry much more oil. We are on one of the main shipping lanes of the world and the Channel is very vulnerable. Our coastline is incredibly near the shipping lanes so that any discharge anywhere up the Channel will threaten many of our beaches, including those in my constituency.
I am told that 91 million tons of crude oil are imported every year. Large numbers of ships come up and down the Channel and it is up to us to persuade the countries using these waters to enforce the new regulations, to sign and ratify the Treaty. The number of signatures at the moment is very disappointing. This co-operation must be obtained, through I.M.C.O. and perhaps diplomatic channels. I hope we will go on trying to persuade I.M.C.O. to renew its efforts and not feel that the Brussels and Bonn Conventions, good as far as they go, are enough. We have to go on tackling the side of the problem with which we can deal, that of illicit discharge, although the problems of collision and stranding are bound to remain.

12.27 p.m.

Mr. James Johnson: I am certain that this is the first time this week when hon. Members on this side of the House have been able to rise and compliment the Government on their good deeds. I do this willingly. My right hon. Friend the Member for Barnsley (Mr. Mason) described the Bill as being "ours". I would say that it is jointly ours. For once we can come together and compliment the Minister upon the Bill. He could not have a happier occasion to begin his career at that Box, although I am not sure how long it will continue.
I represent a major seaport with a large fishing fleet, and to us this is an important Bill. Perhaps we can have oil protection vessels in the same way as we have fishery protection vessels.


Our biggest headache here will be to enforce measures of this kind. I echo the view expressed by the hon. Member for St. Ives (Mr. Nott) that a fine of £5,000 is derisory, bearing in mind the hundreds of millions of pounds involved. It is a sorry thing that the masters of some vessels can even think of cheating in this way and fouling the seas for fish and people on shore.
It is fashionable for speakers now to talk about the damage that is being done to our physical environment. I wish that my colleague, the former Member for Bebington—Dr. Edwin Brooks—was here this morning. He was the only oceanographer who has ever been a Member of the House, and he could have said something about this matter. Ecologists and oceanographers view the present world situation with alarm. We should not discount their view as being unduly alarmist. The pollution of inland and coastal waters, and even deep sea waters, may not bring the world to an end, but it is important that more of us should mass our voices together in relation to this matter. We are not doom-mongers, but we want to keep the world clean, and to avoid what many people believe is its impending doom. Some of us fear an ecological Munich if things go on as they are, with so much pollution of the land and the seas. This Bill is therefore very welcome.
I am not speaking as an apocolyptic cosmologist in talking about our polluted planet. Not many years ago I sat in this Chamber listening to hon. Members opposite deriding our efforts to remedy this situation. Nobody is being an alarmist, or being effete in any way, when he speaks in this manner. We had a former Minister of Environment who, in a debate on a Motion of censure some years ago, caused some mirth on the benches opposite. There is no mirth or derision this morning; we all want to assist the Minister in his task, whether or not we represent constituencies whose boundaries have been fouled by passing oil tankers, like the "Torrey Canyon".
The ocean is dirty. It is a dirty, deep ocean. Like many other people, I read the account of the voyage of the famous Norwegian, Thor Heyerdahl. I ask the Minister how, in conjunction with his opposite number in Japan—let alone Norway—he can make effective the terms

of the Bill. Thor Heyerdahl encountered pollution at sea first off the coast of Mauritania, but later, 100 miles southwest he found pitch-black lumps of tar-like or asphalt-like material, of the size of fine gravel, floating just below the surface. Indeed, he said that it was like being inside a harbour in which there was an outfall from the city sewers.
That is the dimension of the problem that faces us. I wish the Minister luck. He does not need my good wishes for the Bill; he will have no bother piloting this Measure through this House. His job lies outside the House. We were told by my right hon. Friend the shadow Minister that I.M.C.O. is the only international organisation in London. We have no U.N.E.S.C.Os or I.L.Os, but we have I.M.C.O., which is a fine organisation. If the provisions of the Bill are to be properly implemented they will need to be adopted by other nations. At least 20 per cent. of the world's oil fleet is refusing to carry out the provisions of this Measure, which the Minister deems vital. If these provisions are not carried out the Bill, if not meaningless, will be almost futile.
Tankers continue to discharge annually at least 600,000 tons of oil—the equivalent of five "Torrey Canyons"—into the sea while tank cleaning. The Opposition and the Government, as a joint team, must turn their minds to the task outside this country. Not only tankers are to blame; I agree that fishing fleets close inshore and ships of all sizes and dimensions, provided they are oil burners, are to blame to some extent. I do not want to cast too many aspersions, but Mr. J. Kirby, of the United Kingdom Chamber of Shipping, has said that half this amount—300,000 tons—is discharged by Japanese ships. Japan shows no sign of bringing in legislation to enforce these antipollution regulations. The representatives of many countries accept these provisions in principle at international meetings at New York and elsewhere, but they have yet to implement them.
I congratulate the Government and the Minister on giving this lead. We have blazed the trail. We are an ancient shipping nation, and we have led the world in nearly all aspects of maritime activities. We are doing it this morning. People like myself, who represent large ports with fishing fleets, will do all we can to help the passage of the Bill.

12.36 p.m.

Sir Stephen McAdden: It is rare for me to intrude into a Second Reading debate on any Bill, being mindful of the awful penalties attaching thereto, in that the Committee of Selection always assumes that one has a particular knowledge of or an interest in the subject, so that one finds oneself selected as a member of the Standing Committee. I am fortified, however, in the knowledge that as a result of the recent General Election there has been an influx of new and enthusiastic young Members of Parliament, who will no doubt wish to improve their knowledge of parliamentary procedure and will undoubtedly want to volunteer for service on Standing Committees, so that older Members like myself will not be called upon. But we have had an encouraging gesture by the right hon. Member for Barnsley (Mr. Mason) that the Committee stage will not take very long, so that if the worst happens I shall not be too inconvenienced.
I welcome the Bill and congratulate my hon. Friend the Under-Secretary of State upon his translation from the monastic silence of the Whips' Office to the Government Front Bench, and upon the way in which he has introduced the Bill. I also congratulate the right hon. Member for Barnsley for the able and felicitious way in which he responded to my hon. Friend.
I hope that hon. Members on both sides of the House will recognise that the great problem that we have to face in dealing with this matter is the problem of the detection of the offender. Naturally, coming from one of Britain's premier watering places I am interested in seeing that the discharge of oil into navigable waters, especially the Thames Estuary, should be avoided as far as possible. I hope that my hon. Friend the Parliamentary Secretary, whose constituents often find recreation in coming from Harrow to Southend-on-Sea, will also take an interest in seeing that the Thames is not polluted in this way.
As the problem is one of detection, I cannot think what has happened to the excellent suggestion I made two years ago, when I thought that £1,000 or a similar sum should be offered to anybody reporting the master of a ship who was guilty of an offence of this character. I

am sure that if the master of a ship coming up the Thames Estuary knew that any member of his crew was on to £1,000 for giving information which would get that master into trouble, he would think twice before breaking the law.

Mr. Mason: If the hon. Gentleman's suggestion were implemented I would be worried about collisions occurring because of every helicopter and light aircraft owner and pilot going out at the weekends to search for oil slicks.

Sir S. McAdden: While the keeping of records and logs and the possibility of fines for those who break the law and falsify records are important sanctions, unless we can first of all catch those who break the law and prove they have committed an offence, we will get nowhere. I hope, therefore, that the valuable suggestion which I made—about offering rewards to those reporting wrongdoers—will go unheeded no longer.
My suggestion was made in all seriousness and when I heard about this Measure being prepared I was one of the first to obtain a copy of it. I was horrified not to find a mention of my suggestion. I am sure that there has been an oversight and that the Bill will be amended at a later stage to incorporate the paying of rewards in these circumstances. It need not cost the Government anything because the reward could be added to the fine. I am a simple man making a simple proposition and I ask the Minister to give me a simple answer.

12.42 p.m.

Mr. Michael Cocks: I have the honour to represent a city which has an extremely long seafaring tradition. With oil facilities at the outport of Avonmouth, I am pleased to be taking part in this discussion.
The University of Bristol is concerned about the Severnside development and possible industrial pollution. It is, for this reason, running a multi-disciplinary project called "Sabrina" to investigate all these matters and I wish to emphasise what has been said by hon. Members on this subject.
The maximum penalty of £5,000 which can be imposed on summary conviction needs re-assessing. The Minister said that the penalty had been increased from £1,000, but my right hon. Friend the


Member for Barnsley (Mr. Mason) pointed out that it is only recently that pollution in this form has become of such major concern.
We read in the Explanatory Memorandum of a change in the penalty for the offence of giving false or misleading information about oil records. Hitherto this has been only a summary offence. It is now being made an indictable offence with a maximum penalty of two years imprisonment or an unlimited fine. This change of emphasis in the gravity of the offence must be noted, but I remind the House of what the Minister said about the fine being imposed by magistrates. Magistrates are there to administer the law and are bound to take account of the means of those who appear before them. Considering the wealth of the oil companies, the fines that are generally imposed are derisory.
We must consider public opinion. In many cases the public are not aware that the penalties imposed by magistrates may be the maximum penalties. When they read of derisory fines being imposed, they are bound to wonder why wealthy firms are not hit harder. I recall, when sitting in court on one occasion, a case of an accident in which a man had been killed because of inadequate safety measures by the firm employing him. The maximum penalty for that offence at that time was only £300. When the general public read in the Press of fines of this sort being imposed, they are bound to think that the courts are not taking a sufficiently severe view of the gravity of the offence. I hope, therefore, that the Bill will be amended.
The hon. Member for Dorset, West (Mr. Wingfield Digby) referred to Chesil Beach. I suppose that the coastline of Britain has been studied more by geographers and oceanographers than the coastline of any other country. We know an enormous amount about currents and the drift of material near our shores. Is this detailed knowledge being used to prepare adequate contingency plans in case of future emergencies around our coast?

12.46 p.m.

Mr. T. H. H. Skeet: This is an agreeable occasion because of the wide measure of agreement that exists between both sides of the House on this subject.
I was interested to hear the remarks of the hon. Member for Bristol, South (Mr. Michael Cocks) about the penalties proposed by the Bill. We should bear in mind that the major oil companies of the world have come together in an organisation known as the Tanker Owners Voluntary Agreement concerning Liability for Oil Pollution T.O.V.A.L.O.P. This was formed a little time ago, following a conference of these companies in 1969. The agreement was reached to compensate Governments for injuries done from spills.
The liabilities under the agreement have been very considerable indeed—up to 100 dollars per gross registered ton or a maximum in any one incident of 10 million dollars. It will be seen, therefore, that there is a certain amount of backing already by private enterprise to deal with oil spills.
Needless to say that there has never been an occasion on which the full sum that could be paid under that agreement has been paid. However, we must pay tribute to I.M.C.O., the Inter-Governmental Maritime Consultative Organisation, a United Nations body, for lifting the liability even higher; to 135 dollars per gross registered ton or a total in any one incident of 14 million dollars. I would have thought that this was adequate compensation in any circumstances.
I accept that this Measure is binding on us. I am concerned, of course, not so much about the ratifying members but about those who do not ratify, and I am primarily concerned about the large fleets which register with flags of convenience. Liberia commands 25 per cent. of the world's tonnage. How will they react to this Measure? We cannot tell at this stage, and I will return to this subject later.
I support the Bill because I support most international conventions. This is probably the right way of tackling the problem, for we need an international rather than a piecemeal approach. We do not want a multiplicity of legislatures, each with different standards and each so diverse that no agreement can be made, either about penalties or liabilities. This is a question of absolute liability and, for this reason, the question of negligence does not arise.
One must be somewhat critical in that I am perturbed to find that we are


the only country that has moved ahead towards ratification. It must mean that an enormous number of countries, including the United States—though I am pleased to learn that the United States is about to ratify—will need special legislation in their own countries before they can ratify. But I suspect that it will take five years before we have a sufficient number of signatory States to give full impact and force to this legislation.
I fear also that there will be a number of tankers registered under flags which do not ratify and which will thus be exempt from all these provisions, in which case spills can be authorised and no sanction whatever can be taken against them. This is another problem facing us.
The legislation, moreover, is somewhat limited in scope. The reference to ships covers the movement of vessels containing oil moving from point A to point B, but we are likely to experience dangers of another kind in Europe from, for example, defective drillings. I should like to have the Minister's view about this. An incident of this kind occurred off the shore of California at Santa Barbara, when an enormous quantity of oil came to the surface because of a defective drilling. The same could occur in the North Sea. Philips Petroleum has discovered oil in the Norwegian sector and there has been a discovery in the British sector of the Continental Shelf, too. There could be a vast welling up of oil to the surface which would have a more devastating effect than that produced by any tanker which is likely to be in service. However, I recognise that international conventions cannot deal with every aspect of the problem.
Hon. and right hon. Members have been concerned about penalties today, and I have referred briefly to the question myself, but penalty provisions do not cover the full situation. Whether compensation is payable or not, there will be damage done to fauna, to marine life, and, so far as I can gather, some of it will be permanent. If we are so concerned, and rightly concerned, with the standard of life and with amenity and with ensuring that civilisation may carry on for centuries ahead, are we taking the right steps now in ensuring only that

fines are payable while not at the same time taking further steps to ensure at all costs that oil does not get into the sea?
We are painfully aware of the consequences of war in the Far East. Governments engaged in war or insurrections are beyond international conventions. Large tankers are sunk in time of war, and pollution from that cause is far greater than may be caused by any collision occurring in the English Channel. I regret that this side of the matter has not been covered.
I come now to the question of tanker size, which has not so far been discussed today. Before the Second World War, the largest tanker was 22,600 deadweight tons. By 1950, the 50,000-ton tanker had appeared, and by 1957 we saw the 85,000-ton tanker. Now, however, the figures are moving very high indeed. Gulf Oil has several tankers of 312,000 tons each moving between the Middle East and Bantry Bay. Caltex Nippon has a tanker of 372,000 tons for delivery in 1971 to be used on the Far East trade. Globtik Tankers of London has one for delivery in 1973, costing 27 million dollars, which will be 477,000 deadweight tons.
The "Pacific Glory" was carrying about 70,000 tons of oil. If we are concerned about that, ought we not to be more concerned about the "whoppers" which will be coming on to our oceans at a later date? They could do eight or nine times as much damage as the "Pacific Glory" if there happened to be a chance collision. Ought we not to say that I.M.C.O. should round the conference table consider an international limitation put on size until answers have been found to the problem of explosion and to the problems of safe movement of vessels between selected points? I recognise that one way of reducing oil costs is to use tankers of considerable size, but, unless technology moves forward at the same time, we shall have greater difficulties. The Japanese have it in mind to use refinery ships so that they will be able to refine the oil as it moves from the Middle East to Japan. This raises another complication: one will be polluting the atmospere at the same time as polluting the sea.
The movement of aircraft is governed by a meticulous system of traffic control. The movement of vessels is not, even in the English Channel where there are high traffic densities. I know that I.M.C.O. is thinking along these lines, but I feel that further consideration should be given to this aspect of the matter. Ought it not to be said that, before we are prepared to allow these very large tankers to be commissioned and to ply the world's sea lanes, there must be a much more satisfactory code or system of control to ensure that the interests of coastal States are safeguarded?
I, also, am concerned about the inexplicable explosions which occur during tanker cleaning, to which the right hon. Gentleman the Member for Barnsley (Mr. Mason) referred, explosions of the type which occurred in the "Mactra", a tanker of Shell of 208,000 deadweight tons. The same sort of thing occurred on the "Marpessa" and the "King Haakon VII". So far as I can gather, the oil companies have not found the answer to this problem. It is true that the vessels may be in ballast at the time, but they are still capable of causing considerable pollution.
The hon. Gentleman the Member for Kingston upon Hull, West (Mr. James Johnson) mentioned the case of the Japanese, who have not been bound by any arrangements but who have 10 per cent. of the world tonnage and who charter up to another 10 per cent., making about 20 per cent. in all. As he rightly said, the Japanese are discharging on to the international sea lanes about 600,000 tons per annum, which is equivalent to five "Torrey Canyons". This is a matter of concern to us all. The passage of this Bill, though satisfactory in itself, will give no control over the Japanese. I have gone through the list of signatories to see whether their signature appears, but I do not find it, and I have a feeling that at a later date we shall probably find that, while certain other major countries are obliged to accept the convention's terms, Japan will still be outside.
A stricter watch must be kept on the flags of convenience. Both the "Pacific Glory" and the "Allegro" were on the Liberian register. I had expected some

reference today to the size of the fleet registered under the flag of this little State in Africa—a huge register comprising 25 per cent. of the total world tonnage. I have examined the list of signatories to two international conventions, the International Convention relating to intervention on the high seas in cases of oil pollution casualties and the International Convention on civil liability for oil pollution damage, and I find that most countries of this kind are absent.
Norway has 11 per cent. of the world's total tonnage. We have a considerable share, but our Bill is before us to deal with the matter. The Japanese have 10 per cent. straight tonnage, with another 10 per cent. on charter, as I have said. Greece has 5 per cent. Panama, another small State, has a significant 4 per cent. In the first convention, Norway, Greece, Japan and Liberia are mentioned, but in the second, the one which deals with civil liability for oil pollution damage, the flags of convenience do not appear. This is a regrettable and probably fair indication of what is to come. The flags of convenience are the states which have not been observing the rules of the road and these are the people liable to be of great concern to us.
I want to refer briefly to one or two other countries and the steps being taken to deal with oil pollution. The greatest responsibility of all has been shown by this assembly in being the initiators of the first Measure for ratification. In the United States they have had legislation, the Oil Pollution Act, 1924, and the Water Quality Improvement Act, 1970, which will require certain modifications. In addition the fines will be stepped up.
Canada has similar proposals. What we are concerned with is getting the right solution when a slick appears. Is it sufficient simply to sink it on the surface, to put it to the bottom of the sea where it will injure plant life at a later stage and probably have consequential effects on marine life? Is the answer to use emulsifiers? We do not know, and we will have to leave that to the scientists. I have great forebodings about the years ahead, partly because of the increase in tanker size and partly because I do not think technology has kept up with the methods of transportation. I do feel that we should be taking the right steps when


we indicate that special room should be given to a tanker operating in an area of close density traffic. This does not happen now.
While I concede that the right hon. Member for Barnsley was right in saying that it was his Bill, there has been an election in the intervening period which has deprived him of the opportunity of putting it on to the Statute Book. I hope that because it was his Bill we will have no opposition from the Opposition, that he will accede to its terms. We wish it well.

1.4 p.m.

Mr. R. J. Maxwell-Hyslop: I join in the universal welcome which this Bill has had and congratulate my hon. Friend on introducing it so speedily. I have an unhappy feeling that in 10 or 20 years' time we shall still be faced with the same problem because it will still be to the advantage of a minority of oil transporters not to have their ships registered under the flag of any country which adheres to the controlling international organisations. If this is a reasonable prediction, what can we do about it? This Bill is excellent but we have vet to see its teeth, contained in Clause 3 through the regulations. It is a baleful thought that the more teeth we put into it, the less likely it is that the oil will be transported in British-registered vessels or will pass through our territorial waters, over which we have effective control.
If this is a reasonable prediction, does not the real cure lie in the extension of territorial waters so that the jurisdiction of the British courts and the courts of other nations with sea coasts at risk from this ghastly peril will extend to ships creating the risk no matter under what flag of convenience they may be registered? This is the direction in which we must turn our thoughts.
There are simple souls who think that the primary reason why some ship-owners register under flags of convenience is merely to save a little in taxation. There are many other advantages. One is that they are not subject to stringent requirements over the health and safety of members of the crew, something in which we all have a deep and lasting interest. Such countries do not require the same provision of equipment to deal with hazards

met at sea. They do not have the same navigational requirements, the same requirements of skill and suitability of temperament of masters and crew—and the two are not synonymous requirements.
It is my conviction that no matter how many Acts of Parliament we pass, no matter how many international conventions are signed, the loopholes will still be of unacceptable magnitude In saying that, I would not have it thought that I am not an enthusiast for more legislation of this kind and more international conventions. If we believe that in pursuing vigorously legislation and international conventions we shall control the problem to an acceptable degree, then we deceive ourselves. This is my fear.
I am not sure what are the legal limits of enforcement. We seem to have a number of different limits. There are the traditional limits of the territorial waters, and then there are fishery limits which, in some cases, extend beyond the former. It seems that many countries believe themselves to be at liberty to extend their territorial waters unilaterally. At the least, the threat by nations with exposed coastlines to extend their territorial waters unilaterally for these purposes could be, at any rate, a real incentive to the nations which permit themselves to become havens of flags of convenience to participate in international matters.
I am sure that if they do not have adequate incentives they will not do so but will continue to benefit from the registration fees of enormous tonnages, the operators of which can then with impunity pollute the waters of the world. It is so easy, when we see a bit of excellent legislation before the House, to dupe ourselves into believing that we have tackled the problem.
Another matter which is of great concern to me is the definition of the word "ship". For instance, is an oil drilling rig a ship? Certainly many of them float and are towed into position. If an oil drilling rig is not a ship, is it a barge? Or is it a ship only when it is being towed and does it cease to be a ship if it breaks away from its tow? There are some considerations of this kind which I mention now because I believe I am right in saying that the House will have no opportunity of amending regulations passed under Clause 3. Whether the affirmative or


negative Resolution procedure is to be used, I do not know. One thing is certain, that the present procedures of the House give us no amending power.
I ask my hon. Friend to be good enough—and there is a precedent for this under the Carriage by Air Act—to circulate to hon. Members whom he has observed to show an interest in this matter the draft regulations before they are laid on the Table so that if any of us, individually or by consultations with parties outside this House, notice loopholes which could be tightened up, we shall have an opportunity of drawing that fact to the attention of the Board of Trade, or whatever it is now called, before the regulations are laid and either accepted or rejected by the House. It goes without saying that in practice they would be accepted. My plea to my hon. Friend is to avail himself of the excellent precedent of the Carriage by Air Act, in respect of which the Minister gave a similar undertaking to circulate the regulations in draft form. There is nothing to lose in such a course of action, and anything that we can do to make the regulations more explicit and less easy to evade will be commended by my hon. Friend the Under-Secretary of State, because we are all pulling in the same direction.
I noticed with perhaps less enthusiasm than I would normally do so the declaration at the bottom of the Explanatory Memorandum:
The Bill will have no effect on public service manpower.
Will it not? Presumably somebody will carefully check the oil transfer log books. If they are not thoroughly checked, they will not be very effective. Who will do the checking? If it does not result in the use of extra manpower, presumably people who are doing something else will do the checking. It would be interesting to know what people are now doing which it will no longer be necessary for them to do so that they can engage in this very necessary task.
I believe that the use of log books will make the process of enforcement very much more effective if it is known that one cannot get away with fudging the log books. The suggestion made by my hon. Friend the Member for Southend, East (Sir S. McAdden) is excellent. There are some contexts in

which the good old public informer had a useful rôle to play. It was particularly useful before there was a regular police force in this country. With the coming of a regular police force, the public informer became, to some extent, a somewhat distasteful anachronism. But there is no general police force effective at sea. Therefore, the old common informer provisions, which may well be anachronistic inland, certainly have a purpose when there is no one else to carry out the task in the maritime portions of the world's surface.
Public credit should be given to the many commercial airline pilots who, in addition to the very busy life which they lead in conducting their aircraft safely in the crowded skies with the complicated navigational procedures of today to adhere to, put themselves to considerable inconvenience to report oil slicks acurately, promptly and impartially so that effective punitive action can be taken. That is a tribute to which I am sure hon. Members on both sides of the House would wish to contribute. However, it is a somewhat vicarious way of enforcing international conventions.
It would be interesting to know whether there is any means of checking which can be used more effectively at night. It has been mentioned that during the hours of darkness we are particularly vulnerable to discharges of the kind which it is the object of the Bill to prevent. For instance, can sensitive radar detect any difference in the reflective capacity of the surface of the water polluted by oil to any large extent and the surface of water not so polluted? It may well be worth our while, if for no other reason than the very high cost of dealing with pollution, to see whether we can develop a device which can be used by the maritime reconnaissance aircraft of the Royal Air Force and of other maritime powers. If it is known that all one needs to do is to wait for the hours of darkness in order effectively to circumvent the criminal provisions of international agreements and the law of maritime States within their territorial waters, the degree of enforcement will never be as high as the circumstances warrant.
The Bill is very short, and I am among those who doubt whether the criminal sanctions in it are adequate to deal with the commercial advantages of discharging oil irresponsibly. The observations of


my hon. Friend the Member for St. Ives (Mr. Nott) were very germane. I take the point that for certainty of conviction swift trial has some advantages. This means summary trial. But surely trial on indictment is possible, the ship concerned being released against a king-size bond. I should have thought that the penalties should be much more draconian. If the Department's legal advice is that it would be inappropriate if these were applicable to courts of summary jurisdiction, then let the matter be tried on indictment, ships arrested having to be suitably bonded. But we must, so far as it is within our power to do so, make it commercially unrewarding to pollute the sea and to flout the domestic law of maritime States and international agreements. Unless we do so, this problem will not be even half tackled.
Although I am not a lawyer, I think that I am right in saying that magistrates have pretty draconian powers to deal with, for instance, smuggling. They can confiscate a vehicle in which smuggled goods are conveyed. I think that courts of primary jurisdiction have that power. If magistrates can order a ship costing £1 million to be confiscated, I see no reason why they should not be able to impose a fine of, say, £50,000 on the operator of a tanker who has deliberately flouted the anti-pollution regulations.
When very large fines are involved, it should always be open to the accused party to elect to be tried by a higher court, with the safeguard of depositing a bond commensurate with the maximum penalty which could be imposed. Parliament does not deal with any one subject very frequently. It may be many years before the House again legislates on this matter. It is fair to say that inflation will be our bedfellow into the predictable future. Therefore, limits which may seem reasonable now—and I do not think that they do seem reasonable even now—will not be reasonable in five years' time. That is why it is particularly necessary now to set realistic limits to last for some time.
We are amending the Acts of 1955, passed 15 years ago, and 1963, passed seven years ago. So it looks as though the representative pattern is one of legislating about every seven years, and I would have thought that most hon. Members would agree that in seven years'

time a fine of £5,000 will not be a very convincing deterrent to tanker operators.
Alternatively, something which we could consider, instead of fixing by statute a maximum as in Clause 4 of this Bill, is giving the Minister of the day power to raise the maximum by Order in Council, by Statutory Instrument, subject to an affirmative Resolution of the House. I would have thought that an eminently reasonable provision, which I would ask my hon. Friend to bear in mind during the further consideration of the Bill.
It may seem that I have been a little lukewarm in my welcome of the Bill. That is not so. I am an enthusiast for this Bill, but I never believe in letting enthusiasm for any one piece of legislation blind one to the great gaps which are still left, and I would end as I began by saying that I do not believe that legislation of this kind will ever prove effective while there is a single country in the world which can be used as a flag of convenience to circumvent most of its provisions. The only way I can see of obviating that circumstance is a very great extension of the territorial waters of States which have significantly long coastlines. I believe that the sooner we all come to this conclusion and act on it the better.

1.21 p.m.

Mr. Anthony Grant: Mr. Anthony Grant rose—

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Has the hon. Member the leave of the House?

Hon. Members: Yes.

Mr. Grant: By leave of the House I would speak again to reply briefly to some of the points which have been raised. I am very grateful to hon. Members on both sides for the welcome which they have given to this Measure, and I very much appreciate the very large number of offers from both sides to serve in Committee on the Bill and to facilitate its passage through the House. All this is very welcome, and long may it continue, although I do not know whether it will be continued into every conceivable field in which we have to legislate.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), though in support of the Bill, takes, perhaps, as he admits himself, a slightly gloomy view


of the possibilities of its correcting the wrongs about which we are concerned. I would say that what has taken place since 1922 shows that there has been improvement; we do move along gradually; we have seen progress in many ways in dealing with this problem; and the very fact that we are, indeed, constantly discussing it with other countries is, in my view, a sign of increasing awareness, throughout the world, of this problem, and we shall indeed continue to try to solve it.
I think there is a little bit of misapprehension among hon. Members about other countries. The original convention was, after all, signed by 42 countries, including Liberia and Japan. What we are concerned with now is the last convention and amendments in the light of modern circumstances, from which this Bill stems.
The procedure is that the provisions of the convention become effective within 12 months of a majority of two-thirds of the countries signing having been obtained.
I think it would be wrong to suggest that other countries are necessarily not going to consider it. I cannot say what Japan or Liberia will do or what any other country will do. All I can say is what we can do. Like the United States, we are bringing in a Bill, and we shall use every effort we can, I can assure my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby), with the other international organisations concerned, with I.M.C.O., to encourage as many other countries as possible to sign and so to obtain the two-thirds' majority, when the provisions will be obligatory on all countries. I think we are moving in the right direction, and we shall continue to do so.
I would also assure him and other hon. Members that in considering the regulations we shall certainly study very closely the speeches made in this debate, and also take advantage of his offer to consult with him, and the right hon. Member for Barnsley (Mr. Mason) and anybody else, before we frame those regulations.
The right hon. Member for Barnsley asked me a number of questions and I will do my best to answer them. First of

all, he raised the question of the load-on-top system and whether it is compatible with the Bill. As I explained, when Clause 1 is brought into effect the regulations will be made under section 1(3) of the 1955 Act providing for exceptions to the total ban on discharges in accordance with the convention amendments. These are designed not only to permit the use of the load on top but actually to make it or an equivalent system obligatory. They have been prepared in consultation with the industry to ensure that they are compatible. I recognise that many of the tankers not using the excellent load-on-top system are Japanese, but there is, of course, no obligation on them to do so. The amended convention will put that right.
Many hon. Members referred to the question of enforcement and the question of this fine. I confess that when I first looked at it I anticipated that I would have the complaint that it is too big a jump in one go, and too large a maximum fine to allow the magistrates to impose. I find I am not criticised on this ground but that, instead, hon. Members generally are in favour of going further. All I can say at this stage, as I did say in answering an intervention, is that we are making a very substantial jump on this occasion, and we are giving a very considerable framework of maximum powers to magistrates, but I will undertake to think about this matter again and consider whether the penalty can be raised in response to hon. Members' submissions, and whether we can do this in Committee.
The question of enforcement is in the mind of almost every hon. Member, because how can we enforce this? My hon. Friend the Member for Southend, East (Sir S. McAdden), whose intervention I greatly appreciated, produced the novel suggestion that we might have the common informer, and a reward for the informer. All I would say is that we tend to exclude the common informer; the tendency in the whole of our criminal law—and we cannot look at this matter in isolation—over a number of years has been to move away from the common informer, and so I am not wholly enamoured of the idea that we should reintroduce him, attractive as the idea may be in this narrow field of oil pollution.
I can tell hon. Members this, however, that the 1954 convention, Article 10, requires the contracting parties, if provided with sufficient evidence, to bring proceedings against offending ships of their own flags. We ourselves do in fact report a number of foreign ships to their Governments each year, and we ourselves receive, and act on, reports from other Governments. The right hon. Member for Barnsley set out in detail a number of cases of prosecutions which have taken place. So there is this reciprocal arrangement; it goes on between countries. I would not like the House to suffer from the impression that here is Britain in shining white armour—holier than thou, as it were—while all the other countries try to cheat. That is not the position. There is reciprocity in this respect. We attach great importance to the question of ships at oil loading ports, and to ensuring that their oily residues are disposed of in accordance with the convention. We have proposed to I.M.C.O. arrangements which would ensure that tankers and their oil record books are inspected at oil loading ports to ascertain whether a quantity of residue consistent with the last voyage is on board.
In these circumstances, it should be possible to make enforcement easier and, indeed, the new system of recording that we propose, so far from, as I see it, increasing the number of human beings having to study it, will be in such a form that it will be simpler and easier for harbour authorities and other people to ascertain what they want to know, and can lead to prosecutions. That is how we envisage this system working.
My hon. Friend the Member for Dorset, West asked about alternative methods of disposing of oil slick. He looked a little askance at our detergents. Our scientific advisers say that they do not like the word "detergent" in this context; I think they prefer to call it "dispersant". Much work has gone on since the "Torrey Canyon" disaster. Notice has been taken of the French powdered chalk system but we are advised that it is difficult to apply and can affect radar and other instruments in ships. The results of our tests so far have been that the detergents we use now, having a low toxicity, have done much to reduce the

potential damage to marine life, and in our view they are the most satisfactory method of dispersing now known. There has been a great deal of improvement in this matter scientifically since the "Torrey Canyon" disaster, and, although we do not close our minds to other methods, we believe that at the moment we have the best way of dispersing oil.
The right hon. Member for Barnsley referred to the fundamental question, on which he laid stress, of what we do about the enormous tankers of increasing size going up and down the Channel. I agree with him that this is a major and growing problem, with these gigantic vessels increasingly using our somewhat narrow seas, creating a situation in which our coasts are particularly at risk.
Much work is going on in I.M.C.O.—for example, the traffic separation scheme in the Straits of Dover. Great effort has been put into preparation for a conference in 1972 to revise the collision regulations, and we shall play a full part in that. The practical problems to be surmounted, as the right hon. Gentleman knows so well, are formidable and we will also appreciate that international agreement in this respect is vital. There is no other alternative. But I agree that an early solution is of the highest importance to us, and I have taken careful note of the suggestions he has made and expressed so clearly.
My hon. Friend the Member for Bedford (Mr. Skeet) referred to oil rigs. These are quite different things. They are not technically ships within the meaning of the word. I understand that they are not even ships if they break loose. They are covered by the Continental Shelf Act, 1964, Section 5 of which imposes a restriction on the discharge of oil or oily mixture

"(a) from a pipe line; or
(b)… as the result of any operations for the exploration of the sea bed and subsoil or the exploitation of their natural resources in a designated area …".

The restrictions in that Act use the measure of 100 parts per million, which would be inconsistent with the changes proposed in this Bill, but it is intended later to introduce an Amendment to remedy the inconsistency and, therefore, to close a gap in the law relating to leakages from offshore explorations in territorial and inland waters.

Mr. Skeet: If there was a leak from a line from the Continental Shelf, it could be equivalent to a vast tanker pouring out oil and there would be a huge amount of pollution which would not be covered even by the Continental Shelf Act.

Mr. Grant: I am not qualified to deal with a hypothetical situation but I note what my hon. Friend has said. I assure him that all the problems relating to offshore oil rigs are the subject of consultation at the moment and will be the subject of regulations in due course.
Finally, there is the case of the "Pacific Glory". I did not refer to this in my opening speech because it is not strictly the subject of the Bill. The purpose of the Bill is to prevent the deliberate discharge of oil or oily matter into our seas, whereas the leakage from the "Pacific Glory" occurred as the result of a collision. Nevertheless, since the right hon. Gentleman asked me about it, I should tell the House that I am advised that the present situation is "so far, so good" in that the salvage operation, which is very difficult and delicate, is so far proceeding satisfactorily.
The right hon. Gentleman also referred to the question of an inquiry. A preliminary inquiry under the Merchant Shipping Act was started by the Department last Saturday for the purpose of discovering the causes of the disaster so that we may consider what further safety measures are needed. A formal investigation would be legally possible

but the court would have no power to take disciplinary action against officers of the ships concerned.
A more practical course, therefore, is to seek to participate in an inquiry held by the flag State in accordance with the procedure recommended by I.M.C.O. itself. This we have done, and I understand that the Liberian authorities are appointing a board of inquiry which will start work in London next week. We shall take full advantage of that before considering any further British inquiry.
I hope that I have covered all, or at any rate nearly all, the points raised by right hon. and hon. Gentlemen. I look forward to an interesting Committee stage if the House gives the Bill its Second Reading. I believe that the debate has been useful and that the Bill is a valuable piece of legislation. I pay full tribute to the last Government for supporting it, and I believe that it will do much to contribute towards conservation and the avoidance of pollution on land and sea.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40(Committal of Bills).

PUBLIC ACCOUNTS

Ordered,
That Mr. Michael Shaw be discharged from the Committee of Public Accounts and that Mr. Cranley Onslow be added.—[Mr. Speed.]

INDUSTRIAL REORGANISATION CORPORATION

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Speed.]

1.38 p.m.

Mr. Ray Carter: The path that has led to this Adjournment debate has been extremely long and tortuous. I attempted before the recess to initiate a debate on the Industrial Reorganisation Corporation, but I was unfortunate. It is something of a tragedy that the debate now takes the form of a post-mortem rather than of a critical examination of the worthiness of the Corporation as an economic instrument.
I hope that even at this late stage the Government will think again, although, judging by what the Secretary of State said this morning, it seems that their minds are firmly made up. In putting my case to the Minister, I do not simply want to deal with the I.R.C. as a body and with its function, but initially with the background of the industrial state of the nation when the Labour Government took office in 1964.
The setting up of the I.R.C. and all the other economic measures taken by the Labour Government from 1964 onwards were embarked upon in the light of circumstances as they found them. Indeed, they were circumstances which had existed for many years and which demanded that the Government of the day should take action.
I should like initially to look at the industrial structure of Britain in 1964 when the Labour Government took office. In many respects our industrial problems are still much the same today even though the I.R.C. and the industrial expansion legislation and various other Labour Measures were tremendously successful not only in putting our economy on a new base but in channelling it into new avenues. In that period we tried to get to grips with the basic weaknesses of our industrial structure. Therefore, we must look at history to find out why Britain, as it approaches the last quarter of the twentieth century, is faced with such tremendous industrial and economic problems.
All our industrial problems stem from the latter half of the nineteenth century. In 1964 we faced, and still face today, an outdated industrial structure—extremely diverse, many parts of it badly managed and with problems of investment of critical importance. It is probably in this latter sphere that the bulk of our problems lie.
Every American worker is backed up by twice the amount of capital that is behind the British worker, and the amount of capital backing a German worker is something like 50 per cent. more. Even in France and Italy, both of which industrialised at a far later date than did Britain, industrial workers are paid as well as, if not slightly better than, our own workpeople. It is the critical problem of capital investment that bedevils our nation, and our management is pretty weak. We do not always utilise in the right way, as the Prime Minister said yesterday, the capital assets we possess.
The past 30 years have witnessed a rather haphazard decline in our traditional industries, industries upon which Britain relied for a century to provide the basis of its standard of living and hopes for improvements. Even more important, in the last 20 years or so there has been an invasion of foreign capital into the British economy which not only takes the economic power out of our hands, but also to some extent limits political manoeuvrability. The introduction of the I.R.C. and all the other measures introduced by the Labour Government could still only make a dent in all these traditional historic problems. But the Labour Government did make a try and in many areas they succeeded, as I will indicate later.
The answer of the Conservative Party then, as now, was that competition was the only means by which we could solve our industrial and economic problems. I have studied a good deal of economic and industrial history and have discovered that competition by itself has never solved the nation's economic difficulties. Inevitably—and we can go back 150 years—Governments have had to step in either to supplement or to control the market. Railways are a classic example of this fact, and a further example was provided by the lengthy and important debate on the coal industry in the


House yesterday. Therefore in 1964 when Labour took office it had to devise new methods, new ideas and new policies to tackle the underlying weaknesses in our economy.
It was against this background that the I.R.C. was formed. I do not then recall any great outcry from the City, the financial Press or any other group of economic experts telling the Government that they were wrong to do so. On the contrary, there was a welcome given to its formation, though in some sections a guarded one. I had some reservations about the way in which the I.R.C. acted and, on occasions, I did not like the social implications of its work. Nevertheless, as a new instrument of economic control, I supported it, and it is for that reason I appeal today to the Government to think once again about the decision to abolish the Corporation.
Surely the biggest irony is to be found in the fact that if the present Secretary of State were still in his former position as Director-General of the C.B.I. he would be coming to the Government of the day appealing, as Mr. Anderson has appealed to the Government, to retain the Corporation. I am convinced that Mr. Davies would have listened to industry and would have acted as their spokesman in asking the Government to keep the Corporation in being. It is difficult even at this stage, with the threat of execution hanging over the Corporation, to find any bitter opponent of it. I quote that hot-gospeller of competition and of the capitalist method of economic enterprise, the Financial Times:
The Industrial Reorganisation Corporation has made a considerable impact on British industrial life. Without its support it is doubtful, to say the least, that G.E.C. would have absorbed A.E.I. and English Electric. The creation of British Leyland owes much to its activities. In the ball bearing field it thwarted the plans of the Swedish SKF, and in a good many industries I.R.C. intervention has been decisive in determining the shape of changes that have taken place.
I could quote from many other sources—people who support not only the actions of the I.R.C. but would continue to support its existence.
While the I.R.C. functioned, it acted as a merchant bank, as a number of people have observed. From my point of view, it was far more important in

another way. It acted as a catalyst for ideas. A group of people wanting to find what was best in British industry in terms of, say, management control and build on it found the I.R.C. ready to assist. It is a tragedy that this competent and dedicated body of men devoted to the proposition that we should modernise and improve British industry should be thrown on to the scrap heap. I can only observe that the scrapping of the I.R.C. is a piece of sheer political dogmatism.
I have a peculiar interest in the I.R.C. because I represent the constituency of Birmingham, Northfield, which has within its borders the largest single car manufacturing plant in Europe. I refer to what was formerly B.M.C. but which is now part of the British Leyland group. Had it not been for the existence of the I.R.C., B.M.C., as it then was, finding itself £8 million in the red, would either have gone bankrupt or fallen into the hands of the United States car manufacturing industry.
I do not think that any hon. Member would want to see the bulk of British car manufacturing go over to American ownership and control. I well remember that in about 1962 Chrysler acquired a large stake in Rootes. So concerned were politicians and economic interests about the possibility of the British car manufacturing industry gradually falling into American hands that the present Home Secretary, then Chancellor of the Exchequer, went on to the television screens of the nation and gave the assurance that it would never be possible for Chrysler completely to take over Rootes. He said that it was enshrined in the agreement, and he gave his word that it would not be possible for Rootes to be taken over completely. However, the net result was that eventually Chrysler virtually took over that section of British motor manufacturing, and we are now in a situation where we see that almost half of British car manufacturing is in the hands of the Americans.
I would have thought that any Government would try to retain within British hands the ownership and control of such a vital section of our industry. What would the present Government have done in 1965, therefore, when B.M.C. fell upon such hard times? Would they have stepped in and assisted the company?


Certainly their present mood indicates that they would not have done. I would have hoped that, being concerned for the national interest, the Government would have done what the Labour Government did and ensured that the largest single component company of British car manufacturing stayed in British hands. The I.R.C. played a very positive rôle in that case, and £35 million from the I.R.C. is now locked up in British Leyland.
If one considers computers, in this country we now have the second largest computer manufacturing company in the world. That would not have been possible but for the action of the I.R.C. Then, as the Financial Times says, in the ball bearing industry we have ensured that a very strategic part of our economy is retained in British hands.
When one looks at the record of the I.R.C., one cannot help coming to the concluusion that it has not only acted in the economic interests of the nation but also, in a way, to protect British industry from foreign domination. I hope that the Government will give further consideration to this very important part of the I.R.C.'s activities and think again not only about their rather doctrinaire attitudes towards the economic activities of the I.R.C. but about its great contribution towards maintaining British control over vital sections of our industry.
The truth is that we needed the I.R.C. 30 years ago. If we had had it then, it may be that our aircraft and machine tool industries and our shipyards would have been saved. Having created the I.R.C. and saved large parts of British industry, it surely is foolish to chuck out the baby with the bath water now.
At a time when the Government are negotiating British entry into the European Economic Community, it is pertinent to look at what the Community is doing by way of industrial restructuring. It is now actively pursuing the possibility of setting up a European I.R.C. If Her Majesty's Government eventually sign the Treaty of Rome, it may be that they will have to become part of a wider I.R.C. within Europe.
I repeat that the Government should look again at the decision that they propose to take. From my standpoint and from that of many other people who are well away from me politically, it would appear that the Government are wander-

ing in a political desert and that when they come upon the sort of oasis which I see the I.R.C. representing they are only too ready to fill it in.
History will recall one day that the I.R.C. and other such developments were sacrificed on the altar of ignorance and blind obstinacy. The record of the I.R.C. is proven. In the years to come, I am sure that we will need the 1.R.C. even more than we do today. The debate yesterday on the coal industry serves to prove that large sections of British industry are traditionally based and highly localised. At some time in the future, the Government will have to step in to assist the development of our economy. We cannot rely on competition. History has proved that.
I urge the Government to re-examine the record and prospects of the I.R.C. If they do that impartially and objectively. I am sure that they will come to the same conclusion as most other people outside the framework of politics who are interested in the industrial and economic life of the economy and who feel that the I.R.C. should be retained and strengthened. I sincerely hope that the Minister will look again at the possibility.

2.0 p.m.

Mr. Eric Ogden: The Minister will be aware, because he has been in the House for some time, that he is not only responsible to his senior Ministers, his party colleagues, his Cabinet and his Prime Minister, but he is also responsible and accountable to the House of Commons.
Whilst there may not be many Members in their places this afternoon, the matter that my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) has made it possible for us to discuss is of great interest and concern to many people not only in the South and the prosperous regions of the Midlands, but also to even more people in the development areas and parts of the intermediate areas.
In the past, the Conservative Opposition were united with Members of the Labour Party in the demand that Parliament should have the right to be consulted, to be informed, to be able to express its view, and to offer advice before decisions were made. That has not happened in this instance. A decision has been taken on this important topic


without consultation with Parliament. The Minister has obviously had a great deal of consultation with many people involved; but my point is that, whilst in Opposition right hon. and hon. Gentlemen opposite were keen to claim the right to be consulted before decisions were made, that has not taken place on this occasion.
I am no great believer in eleventh hour appeals to Ministers to change their minds. It may happen when the Government have a majority of two, three, or four; but it is unlikely that it will happen in this case. Therefore, I am not putting forward my plea in that way—not that the Minister is any less sympathetic than anyone else. I hope that the Minister will persuade his colleagues to take another look at this decision, but I have no great hope of that. Therefore, I suggest that we should have more information than has been given about the reasons for this decision.
It was no surprise to anyone when the information came through. However, I am a little disappointed—I say this with no disrespect to the hon. Gentleman—that, bearing in mind the importance of this matter to people outside the House, the butcher is not here as well as the block. That is not perhaps the most appropriate phrase, because the hon. Gentleman is no one's fool. However, the Secretary of State certainly is the butcher, and an unnecessary butcher at that.
The Minister's statement this morning and the Chancellor's statement on Tuesday about the I.R.C. was not unexpected. The technique of the informed leak has been much in operation by the Government over the last few months. On 11th October, the headline in the Business Observer ran, "Tories to axe I.R.C.…", and it stated:
The Industrial Reorganisation Corporation is to be abolished. The decision has now been finally made by the Government … The announcement will he made by John Davies, Minister of Technology, shortly after Parliament reassembles at the end of the month. The decision is in line with the general non-interventionist philosophy for industry which Davies announced in forthright terms at last week's Conservative Conference.
It takes the point made by my hon. Friend:
But it represents a major shift in his personal thinking. Before his election, as

Director General of the Confederation of British Industry, Davies reflected industry's desire to perhaps clip the I.R.C.'s wings but to keep it in a watered down form.
The Business Guardian, on 13th October, inspired no doubt in the usual way, states,
The abolition of the Industrial Reorganisation Corporation—it seems to have been killed off by Mintech more in sorrow than in anger",
and offers the suggestion that it indeed is being done simply because this Government have taken as their overriding priority their desire, their wish, to reduce Government expenditure. This is based on the fact that the Government, in their overall priorities, will reduce Government expenditure. Every Department must follow it through and this is one way to cut Government expenditure. I suggest that it is a bookkeeping exercise; a short-term saving at long-term expense. It is a short-sighted decision which will deny to industry one important way of making British industry more effective, more profitable, and more productive.
The Minister may have some information about the cost saving, but there is a contradiction. In one statement the Government said that they hoped to save £40 million. In earlier information it was suggested that at least this year the I.R.C. has committed £147 million of the £150 million available to it. We can all make savings. If I do not spend anything outside the House I have saved a lot of money. But it is not the usual way of making and taking savings into account.
I should now like to mention the work of the I.R.C., which has been a much under-estimated body. I remember the debates and the divisions that took place on this subject. Indeed, the Conservative Opposition at that time were dividing the House against the proposals to create the I.R.C. and to provide it with funds. But whilst they were going through the lobbies in opposition to the Government's idea of being able to help industry in this way, the industrialists were queueing up outside to get their share of the money that was to be made available.
The best of British industry is as good as, and probably better than, any in the world. But the more I get to know about some sections of British industry the more


I am convinced that some could not run a chip shop. In many cases they are 20, 30 and 40 years out of date.
The great work of the I.R.C. has not been just making money available when normal market operations could not make it available. Its work has been the finding of managers, the suggesting of mergers, reorganisation, and making use of new methods. This has been the real work of the I.R.C., and it has not been praised enough.
Cammell Lairds in Birkenhead was about the only rescue operation in which it was involved. Everyone was most grateful. That operation seems to have been successful and we hope that it will continue. That was essentially a reorganisation operation with the introduction of new management methods rather than finding money, because it was not the only place from which money could be made available.
The Minister is part of a Government which have denied themselves the opportunity of considering the application of the Merseyside Docks and Harbour Board, which, with no disrespect to the management of that board, is in a difficult position. The Government are saying, "What we did for Cammell Laird through the I.R.C. we cannot do for the Mersey Docks and Harbour Board."
We are grateful for the opportunity that we had to meet the Minister for Transport Industries. He seems convinced of the importance of the Port of Liverpool, but the Government are confirming that the one way they could help that port is to be denied. The Port of Liverpool is important both for Liverpool and for Merseyside. Can anyone imagine what would happen to the Lancashire cotton industry, the petroleum and oil industry and the chemical industry, which stretch along the Ship Canal, if the port were to close? In this instance what happened on one side of the Mersey regarding Cammell Laird six months ago cannot now be done.
Perhaps the Minister will give some indication about the alternatives, the legislation, and the aid or assistance which will come to take part of the work that has been done by the I.R.C. Cammell Laird was the only rescue operation. My hon. Friend has mentioned the machine

tool industry, British Leyland, the ball bearing industry, General Electric, and others.
I ask the Minister to be more generous to the chairman and members of the I.R.C. than his right hon. Friend and other Ministers have so far been. I do not know of any case where the I.R.C. has forced anything down the throat of British industry. It has been a matter of suggestion, co-operation and working together all the way through. It is, therefore, strange that the Secretary of State should come to the Dispatch Box and say, in none too glowing terms, that the I.R.C. has done a good job but it will have its head chopped off anyway. I think some better words should come from the Minister today.
I understand that at this moment there is a meeting of the I.R.C. Board going on. It might be appropriate to say some real word of encouragement and thanks. They could have done much more profitable things for themselves over the past years than serving a public authority. I would hope—while I ask questions about reasons and costs and the legislation and proposals that the Government have in mind—that this is just an interruption in the work of the I.R.C. There is a place for an organisation like this.
I hope that, in due time, when places in this House are exchanged once again and the Government are back in their rightful places over there and the Opposition back in their places on this side, we wiil—[Laughter.] I mean the old Opposition back on this side of the House. One of the first things that we will do when that happens is see what help British industry should receive from the Government. It is ironic that, whereas it is normally suggested that the Conservatives help private enterprise, in fact it had more help from a Labour Government than ever before. The work of the I.R.C. has been interrupted, not ended.

2.11 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): I am very glad that the hon. Member for Birmingham, Northfield (Mr. Carter) was successful in getting this opportunity to debate again the question of the I.R.C., which he failed to secure in July. I should not like him to feel that the Government or the then Ministry of Technology wished to frustrate him in


his attempt to do this. I apologise for the fact that, due to the extremely short notice, no Minister was available on that occasion, but I assure him that we welcome this debate. I believe that he has performed a useful function in raising it at this time.
The hon. Member is fortunate that there was no hurry to get through the Adjournment, because we have plenty of time. I am a little disappointed that so few hon. Members seem to wish to take part in a debate on what has been described as "this tragically wrong" decision by the Government. That does not lend great weight to some of his points.
The hon. Member mentioned one matter about when my right hon. Friend made his statement. He, of course, got in touch with my right hon. Friend's office on Tuesday morning. My right hon. Friend was very busy trying to get the statement prepared, so that it could be made before the hon. Member's debate, because it was obviously relevant to that debate, and we wished that the full information should be made available in time for it. So my right hon. Friend could not give him a substantive reply until that statement had been cleared and agreed. However, his office left two messages in the House for the hon. Gentleman to get in touch. I gather that it was not possible for him to do so until yesterday evening. Although that meant that he did not know about the events of this morning until last night, I would only comment that this was much longer notice than we had about his July attempt to raise the matter before.
Both hon. Members who have spoken want me to give a little of the background to this decision and to the Government's reasons for reaching it. My right hon. Friend opened up the subject this morning quite considerably, but the hon. Member for Northfield, in an attractive and restrained speech, wished, I think, to take the debate a little wider than just the rôle of the I.R.C.: he wanted to talk about our general industrial problems and difficulties.
Before that, however, I should like to join both hon. Members in their tributes to the board and the staff of the I.R.C. Particularly, I should like to pay a fulsome tribute to Lord Kearton and Sir Joseph Lockwood, the two Chair-

men of the Corporation, and perhaps it would not be wrong to mention Mr. Grierson and Mr. Villiers, the two directors. There is no implied criticism whatever of any individuals in the Government's decision to do away with the Corporation; indeed, quite the reverse. It has been run by able and industrially knowledgeable people who I believe have shown both leadership and zeal, as well as panache, in the execution of the rôle allotted to them. The fact that we question and disagree with that rôle does not mean that we criticise their fulfilment of it.
It is perhaps an earnest of the good relations which exist between the members of the board and the Government that the board has made the very public-spirited decision to stay on until present commitments have been discharged. We warmly welcome that action and thank them for it.
Turning to the general industrial situation, the hon. Gentleman is, of course, right that we face serious problems of low investment. No figure that one looks at in comparison with our industrial competitors gives one much confidence about the performance of British industrial investment over decades. One has to be very careful to ascribe credit or blame to any Government or any Government policy. Investment grants have not had the desired effect on investment. Indeed, there has been precious little increase, if any, in real terms since they were introduced. Although we can argue about all these general matters in relation to investment, I shall be touching on some of the thoughts in the Government's mind which have helped them to reach the conclusion that the I.R.C. has not stimulated investment and, indeed, could have had the reverse effect in some instances.
Matters of management and of the general way in which our industry is run will all be appropriate to later stages, and I do not think that the hon. Gentleman would wish me to make a long statement of Conservative industrial policy. This is well enough known and we shall have later opportunity to debate these things. I would just take issue with him on one small point. Competition is, of course, vital. We intend to pursue a forceful competition policy, but it would be misleading to say that competition is the only policy which this


Government have. That is totally untrue. There are all sorts of mechanisms which operate in the City which have moved towards causing mergers and take-overs. There is a whole series of pressures which affect investment and management and the raising of capital, and they are all relevant. Competition is but one facet of our industrial policy, and, of course, not the only one.
I can illustrate this in relation to mergers. In 1964 there were 939 acquisitions by one company of another, with a total value of £502 million. This had grown by 1968 to 598 acquisitions—that is, fewer acquisitions—but involving £1,653 million worth of assets. These are big figures both in numbers and in terms of total assets acquired. But within that huge total only some 20 to 25 mergers per annum were inspired by the I.R.C.
It is not possible to claim that the almost feverish take-over activity of the last few years has been due to the I.R.C.; it has been going on despite it. Further, it is true that many mergers which it claims to have brought about may have been facilitated by it, but in many cases they would have taken place despite it—if it had not existed. That is the basic deficiency in the argument put forward by hon. Members opposite. They say that certain things have happened as a result of the I.R.C. and seem to assume that if it had not existed or done what it did totally catastrophic results would have been bound to occur instead.
No one can prove that that would have been so, but I do not believe that it can be proved that marvellous results would have flowed otherwise. One cannot sustain an argument on the basis of what might have happened if the I.R.C. had not been there, because none of us will ever know. The British Leyland and the B.M.C. merger might well have taken place without the I.R.C. being there. So might other mergers. Equally, some mergers which the I.R.C. did bring into existence might have been better not to have taken place. All these things are imponderables, and have no precise answers, because it is impossible to say what would have happened in the alternative.
The Government do not object to the I.R.C. in its rôle of marriage broker—this is quite a responsible activity, which implies no use of public funds—but we have some suspicion how wise it is to use public funds to promote mergers and we have definite objection to the use of public funds to upset a market decision and to change the result of a takeover bid by buying into the shares with public money.
My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), who dealt with these matters, made the position quite clear on 8th July, 1968, when he said:
A facilitating I.R.C.—that is, facilitating the market mechanism—is one thing and may be useful. A fighting I.R.C. is another animal altogether, because it uses the taxpayers' purse to back its judgment on what, in almost every case, can only be a hypothetical and marginal difference in the national interest."—[OFFICIAL REPORT., 8th July, 1968; Vol. 768, c. 67.]
That is one of the Government's objections—that money has been used for purposes such as that.
It is not a strong point, and I do not want to put much weight on it, but it is interesting to record that the total cost of the investments in equity shares which the I.R.C. has made is £20·4 million. The equity valuation of those investments last Friday was £16·4 million. Stock market values have gone down, but there is no clear evidence there that these restructurings have led to shiningly successful firms which are able to justify the intervention in the market which the original investments represented.

Mr. Ogden: Can the Minister, from his own knowledge of Cammell Laird—and he has visited the area and has seen the operation—contrast the cost of the drop in share value with the loss both in capital and opportunity of new earnings if Cammell Laird should close?

Mr. Ridley: I shall say a word about Cammell Laird later. The success of a merger or a take-over is represented in due course by whether the value of the assets is enhanced. It is early to say what the eventual value of the assets in the merged companies with which we are dealing will be in the future; I merely make the point that so far they have gone down. It may be that in the future they will go up—but that is not a shining piece


of evidence in favour of what has happened.
I come now to the use of public money for this purpose. That is the second of the Government's objections to what has happened in the past. It has been expensive, and by taking money out of the system there has been less money available for general industrial investment. It might be said that this was extra money raised by extra taxation, but if there had not been that extra taxation there would have been more money in the economy available for savings and investment, which probably would have found its way into industrial investment. Therefore, what has been happening is that a portion of the nation's capital has been directed discriminately into certain firms and industries to the detriment of others, and this could have had some small part to play in the difficulty that other companies have found in finding capital, and the high rates of interest. If we distort the pattern of capital investment in this way it must be expected that there will be marginal consequences upon those not fortunate enough to obtain loans of this sort.
It is natural that if we make this sort of capital available many firms will wish to participate in it. It would be surprising if that were not so. That is the reason why many industrial companies have wanted to see the continuation of this money. But the more that participate in loans of this sort the less money there is in the system to extend to those who are not so fortunate. This discriminatory effect is one of the Government's objections to the I.R.C.
The Government prefer to leave the restructuring of industry to market forces. I should like to say a word about the foreign experiences of the hon. Member. The I.R.E. in Italy has been quoted, but it would be agreed by most people that this was a bad example and that it does not mirror the I.R.C. The proposed German body, the V.I.A.G., and the French body, the I.D.I., are both rather different from the I.R.C. in pattern. The German body has 33 per cent. private capital and the French body 60 per cent. private capital, the balance being State money, and this puts them much nearer the content of the normal merchant bank, and to

comment on these organisations is not for me. I merely draw attention to the differences between them and the wide powers of large State investment that the I.R.C. represents.
The European Investment Bank was created not to restructure companies in the first place. It was to contribute to the balanced and stable position of the Common Market. This was an instrument of regional policy in the building of the infrastructure and matters of that sort. An I.R.C.-type rôle was proposed for the E.I.B., but this was principally to facilitate the construction of trans-national companies. The Commission has not had its proposal accepted by all the countries of Europe; indeed, there are fairly strong differences of view within the Six whether the Bank should be allowed to undertake this rôle. There is no certainty that the project will come to fruition. Even if it were to do so, it would fall far short of the sort of I.R.C. that we have had. The main obstacles to trans-national companies in Europe are fiscal, and to do with the different company laws in each country. These are the sort of obstacles that need much more to be got over, and the problem, as I think the hon. Gentleman will agree, is an entirely different and dissimilar one from the question of industrial restructuring within the nation State which we have been discussing in relation to the I.R.C.
We shall be happy to play our part in the development of the European Investment Bank if it goes forward and if we are members of the Common Market, but this is not only a different approach but is to serve a different purpose, and it is has not yet even got off the ground. I therefore do not think that there is any conflict between what the Government are doing and their desire to become members of the E.E.C.
The two hon. Gentlemen referred to another rôle of the I.R.C., that of making loans to firms in difficulties. The hon. Member quoted Cammell Laird. I think it is fair to say that there is also the second British Leyland loan which the I.R.C. made, and these two are examples of the different type of intervention which the I.R.C. undertook.
I think that they are political acts if it is decided to save Cammell Laird and not to save Beagle, to save firm X and not save firm Y. This is a highly charged


political decision. The Government have made it clear that they are not, in general, going to save companies where they believe that the prospects of long-term viability to do not exist. That is a political decision, and if the Government make political decisions it is for them to carry them out, to be responsible for them, and to be answerable for them to this House. We believe that if situations such as those arose in the future it would be right not to get an agency, so to speak, to take the decision but to be responsible for it ourselves and to make sure that it is quite clear where that responsibility lies.
The hon. Member for Liverpool, West Derby (Mr. Ogden) asked how we would help. This is a hypothetical question. There is no case for help before us, and we shall be straight with the House and make it clear that if there is such a request we shall deal with it as we think fit and be responsible to the House for our decision.

Mr. Ogden: I apologise for taking up so much time in someone else's Adjournment debate, but the I.R.C. was interested not only in giving financial aid but in the management and prosperity of the company thereafter. The hon. Gentleman says that the Government have abolished the I.R.C., and that there is no case for help before them. The hon. Gentleman has visited Merseyside. He knows that the case of the Merseyside Docks and Harbour Board is before the Government. He cannot now, on 30th October, say that there is no case before the Government. This case has been before them since July.

Mr. Ridley: I shall come to the case of the Merseyside Docks and Harbour Board. This is a matter for my right hon. Friend the Minister for Transport Industries, and, as the hon. Gentleman knows, my right hon. Friend has been to Merseyside and had public discussions and is taking full political responsibility for his action. I do not want to say what he will do, or in any way trespass on his ground in relation to that problem, but I think I have made it clear that in a case such as this it is the Government's responsibility, and the Government intend to shoulder it and find what means they think appropriate to provide a solution in every case.
I think that it falls to me to give the hon. Gentleman the figures for which he asked. The I.R.C. Act gives the Corporation power to lend up to £150 million. To date the total of its lending, plus its commitment to lend, which the Government have said will be honoured, amounts to about £140 million, so that it is, as it were, within £10 million spent up. By abolishing the Corporation we shall, I believe, relieve ourselves of a liability for perhaps £20 million this year, maybe £30 million, and if the Corporation had been allowed to go on at the rate of spending of the past we estimate that it would have incurred expenditure of about £40 million a year. My right hon. Friend the Chancellor of the Exchequer said in his statement that that amount of money would be saved by winding up the Corporation.
The total of the investments will, of course, in due course be realised as they come to fruition or maturity or are sold, and that will add to the savings by bringing more money into the Exchequer, but it is impossible to forecast the timetable under which that money will be realised. Much depends on proper management of the investments and the industrial and economic situation at that time.
The hon. Gentleman also asked about legislation. I can only tell him that my right hon. Friend will legislate in due course on the lines announced by the Secretary of State this morning. I do not know when the legislation will come forward, but my right hon. Friend hopes that it will not be too long delayed, and I can only ask the hon. Gentleman to be patient until it is possible to give a firm date. I can tell him, however, that the Government wish to press on with this legislation as soon as time can be found for it.
I think that I have given some of the reasons why the Government decided to abolish the Corporation. It arises partly out of our general industrial policy of not intervening and leaving the market to take its own decisions.

Mr. Carter: Do the Government accept that there may be a case for intervening, to go outside the normal bounds of economic criteria, to protect a section of British industry for purely strategic reasons against foreign invasion and domination?

Mr. Ridley: In general we welcome foreign inward investment, as did our predecessors, the Labour Government, who went to great lengths to encourage it. I think that the hon. Member for West Derby will agree with me when I say that if it had not been for foreign inward investment the pattern of regional prosperity would have been much more unhappy than it is, because in many cases these international and foreign companies are much more mobile than our own.
There are, of course, ultimate security and political reasons why some take-overs by foreign firms might be resisted, but it would be impossible to lay down criteria or try to deal with any hypothetical situations. So long as there is no reason why, along the lines that I have indicated, we should not do so, we would welcome foreign investment in this country, just as I hope our overseas partners would welcome British investment overseas. I believe that by these swappings in investment we increase understanding of each other's

problems. We increase our dependence upon each other, and we increase technical know-how and trade and the exchange of people between one country and another. All this is highly desirable. But I accept, as the hon. Gentleman says, that there may be ultimate strategic and commercial reasons why one would not want to give a complete assurance that no foreign take-over would be resisted. This must be a matter for day-to-day decisions.
I hope that I have given the reasons for the Government's decision. It has not been taken in a doctrinaire fashion, just as I accept that the Corporation was not set up originally for doctrinaire reasons. It has been the result of a careful and considered review after much consultation. I believe it to be the right decision, and I hope that in due course it will commend itself to both sides of the House.

Question put and agreed to.

Adjourned accordingly at twenty minutes to Three o'clock.